Swallows Holding, Ltd. - Page 99

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               An interpretative Federal tax regulation is reasonable under           
          Natl. Muffler Dealers Association v. United States, supra, only             
          if it “harmonizes with the plain language of the statute, its               
          origin, and its purpose.”  Id. at 477; see also United States v.            
          Vogel Fertilizer Co., 455 U.S. 16, 26 (1982).  For this purpose,            
               A regulation may have particular force if it is a                      
               substantially contemporaneous construction of the                      
               statute by those presumed to have been aware of                        
               congressional intent.  If the regulation dates from a                  
               later period, the manner in which it evolved merits                    
               inquiry.  Other relevant considerations are the length                 
               of time the regulation has been in effect, the reliance                
               placed on it, the consistency of the Commissioner’s                    
               interpretation, and the degree of scrutiny Congress has                
               devoted to the regulation during subsequent                            
               re-enactments of the statute.  [Natl. Muffler Dealers                  
               Association v. United States, supra at 477.]                           
               Following its decision in Natl. Muffler Dealers Association            
          v. United States, supra, the Supreme Court decided Chevron                  
          U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837               
          (1984).  There, the Supreme Court stated:                                   
                    When a court reviews an agency’s construction of                  
               the statute which it administers, it is confronted with                
               two questions.  First, always, is the question whether                 
               Congress has directly spoken to the precise question at                
               issue.  If the intent of Congress is clear, that is the                
               end of the matter; for the court, as well as the                       
               agency, must give effect to the unambiguously expressed                
               intent of Congress.9  If, however, the court determines                
               Congress has not directly addressed the precise                        
               question at issue, the court does not simply impose its                
               own construction on the statute, as would be necessary                 
               in the absence of an administrative interpretation.                    
               Rather, if the statute is silent or ambiguous with                     
               respect to the specific issue, the question for the                    
               court is whether the agency’s answer is based on a                     
               permissible construction of the statute.                               






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