-142-
I will only add a cite to Motor Vehicle Mfrs. Assn. of the
United States, Inc. v. State Farm, 463 U.S. 29 (1983). In that
case, the Supreme Court wrote that a regulation was arbitrary and
capricious if:
the agency has relied on factors which Congress
has not intended it to consider, entirely
failed to consider an important aspect of the
problem, offered an explanation for its
decision that runs counter to the evidence
before the agency, or is so implausible that it
could not be ascribed to a difference in view
or the product of agency expertise.* * *
Id. at 43; see also Sunstein, 90 Colum. L. Rev. at 2104-2105.
That is of course far from what happened here. The
Secretary faced an ambiguous phrase in a Code section,
unambiguously aimed at giving foreign corporations a major
incentive to file their returns. He also learned by experience
that some taxpayers would wait to file until a notice of
deficiency was issued, Anglo-American, 38 B.T.A. 711, or would
file only after starting a case in this Court, Blenheim, 125 F.2d
906, or would refuse to file even after a revenue agent came
calling, Ardbern, 120 F.2d 424. To issue a regulation with a
fixed grace period and provision for exceptions reflected
experience, failed to consider no aspect of the problem, and ran
counter to no reasonable evidence before him. The regulation did
change existing law, but under Chevron and Brand-X, the Secretary
should be allowed to “change the law”--even if the law is our
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