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HALPERN, J., dissenting:
I. Introduction
This case involves the deference (if any) that we must show
the Secretary of the Treasury’s (Secretary’s) construction of
the Internal Revenue Code. The majority holds that we need show
no deference to the Secretary’s construction found in section
1.882-4(a)(2) and (3)(i), Income Tax Regs., imposing a timely
filing requirement on foreign corporations. It holds the
regulation to be invalid. I disagree.
In Chevron, U.S.A., Inc. v. Natural Res. Def. Council,
Inc., 467 U.S. 837, 842-843 (1984), the Supreme Court set forth
a sequential approach for determining whether an agency’s
construction of a statute it administers should be given
deference:
First, always, is the question whether Congress has
directly spoken to the precise question at issue. If
the intent of Congress is clear, that is the end of
the matter; for the court, as well as the agency, must
give effect to the unambiguously expressed intent of
Congress. * * * [I]f the statute is silent or
ambiguous with respect to the specific issue, the
question for the court is whether the agency’s answer
is based on a permissible construction of the statute.
Id. (fn. ref. omitted). That approach was reaffirmed by the
Supreme Court in Atl. Mut. Ins. Co. v. Commissioner, 523 U.S.
382, 389 (1998) (a case involving the validity of an income tax
regulation), in which, with respect to the second question, the
Court added the admonition: “[T]he task that confronts us is to
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