Swallows Holding, Ltd. - Page 98

                                        -54-                                          
          States, 440 U.S. 472 (1979).15  See, e.g., Robinson v.                      
          Commissioner, 119 T.C. 44, 70 (2002); Walton v. Commissioner,               
          115 T.C. 589, 597-598 (2000); UnionBancal Corp. v. Commissioner,            
          113 T.C. 309, 317 (1999).  Under Natl. Muffler, which like the              
          present case involved an interpretative regulation issued under             
          section 7805(a), an interpretative regulation is valid if it                
          implements a congressional mandate in a reasonable manner.16  See           
          Natl. Muffler Dealers Association v. United States, supra at 476-           
          477 (citing United States v. Cartwright, 411 U.S. 546, 550                  
          (1973); United States v. Correll, supra at 307); see also United            
          States v. Cleveland Indians Baseball Co., 532 U.S. 200, 218-219             
          (2001); Newark Morning Ledger Co. v. United States, 507 U.S. 546,           
          575-576 (1993); Rowan Cos. v. United States, 452 U.S. 247,                  
          252-253 (1981).  We must defer to a Federal tax regulation that             
          is reasonable under this standard.  Cf. United States v. Mead               
          Corp., 533 U.S. 218 (2001); Smiley v. Citibank (S.D.), N.A.,                
          517 U.S. 735, 739 (1996).                                                   


               15 A task force of the American Bar Association has recently           
          concluded likewise that the Supreme Court primarily reviews                 
          interpretative Federal tax regulations under the analysis set               
          forth in Natl. Muffler Dealers Association v. United States,                
          440 U.S. 472 (1979).  See Salem et al., ABA Section of Taxn.                
          Report of the Task Force on Judicial Deference, 104 Tax Notes               
          1231 (2004).                                                                
               16 Legislative regulations, by contrast, are upheld “unless            
          arbitrary, capricious, or manifestly contrary to the statute”.              
          Chevron U.S.A. Inc. v. Natural Res. Def. Council, Inc., 467 U.S.            
          837, 844 (1984).                                                            




Page:  Previous  44  45  46  47  48  49  50  51  52  53  54  55  56  57  58  59  60  61  62  63  Next

Last modified: May 25, 2011