-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).
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