Swallows Holding, Ltd. - Page 18

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          determining whether section 1.882-4(a)(2) and (3)(i), Income Tax            
          Regs., is based on a permissible construction of section                    
          882(c)(2) is whether it represents a “reasonable” interpretation            
          of that section.  See Atl. Mut. Ins. Co. v. Commissioner, 523               
          U.S. at 389.2                                                               
               To be more specific, we must determine whether the 18-month            
          limitation found in section 1.882-4(a)(3), Income Tax Regs., is             
          reasonable, since the otherwise applicable filing limitation                
          found in section 1.882-4(a)(2) and (3)(i), Income Tax Regs.,                
          construes the statute in a similar (indeed, in a more generous)             
          manner than the courts have construed it.  See Judge Swift’s                
          dissent p. 90.  I have already quoted our report in Espinosa v.             
          Commissioner, supra, to the effect that the policy behind                   
          section 882(c)(2) implies a cutoff point or terminal date after             
          which it is too late to submit a tax return and claim the                   
          benefit of deductions.  The question is thus one of line                    
          drawing, and the majority has failed to convince me that the                
          line drawn by the Secretary is unreasonable.  Judges Holmes and             
          Swift have adequately dealt with the majority’s conclusion to               
          the contrary, and I have nothing to add.  I also fully join                 


               2  I am not ready to join Judge Holmes in concluding that,             
          in United States v. Mead Corp., 533 U.S. 218 (2001), the Supreme            
          Court “clarified the law, by conflating the standard of                     
          ‘reasonableness’ with the standard of ‘arbitrary, capricious, an            
          abuse of discretion, or otherwise not in accordance with law.’”             
          Judge Holmes’s dissent p. 141.                                              





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