-106-
In Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467
U.S. at 843-844, the Supreme Court said:
If Congress has explicitly left a gap for the agency
to fill, there is an express delegation of authority
to the agency to elucidate a specific provision of the
statute by regulation. Such legislative regulations
are given controlling weight unless they are
arbitrary, capricious, or manifestly contrary to the
statute. Sometimes the legislative delegation to an
agency on a particular question is implicit rather
than explicit. In such a case, a court may not
substitute its own construction of a statutory
provision for a reasonable interpretation made by the
administrator of an agency. [Fn. refs. omitted.]
Section 882(c)(2) does not specifically make the allowance
of deductions to a foreign corporation contingent on a timely
filed return, nor does it grant the Secretary express authority
to prescribe regulations defining timeliness for purposes of
section 882(c). In promulgating section 1.882-4(a)(2) and
(3)(i), Income Tax Regs., the Secretary exercised his rulemaking
authority under section 7805(a), which gives the Secretary
general authority to "prescribe all needful rules and
regulations for the enforcement" of the Internal Revenue Code.
See T.D. 8322, 1990-2 C.B. 172.1 The appropriate standard for
1 In Boeing Co. v. United States, 537 U.S. 437, 448 (2003),
the Supreme Court said of another Treasury regulation issued
under the authority of sec. 7805(a): “Even if we regard the
challenged regulation [sec. 1.861–8(e)(3) (1979), Income Tax
Regs.] as interpretive because it was promulgated under �
7805(a)'s general rulemaking grant rather than pursuant to a
specific grant of authority, we must still treat the regulation
with deference. See Cottage Savings Assn. v. Commissioner, 499
U.S. 554, 560-561 (1991).”
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