-68-
As to the remaining two considerations, i.e., the degree of
scrutiny that Congress has devoted to the regulation in question
during subsequent reenactments of the statute and the reliance
placed on that regulation, these considerations also do not
support the Secretary’s issuance of the disputed regulations. As
to the former, section 882(c)(2) has not been amended since the
issuance of the disputed regulations. As to the latter,
petitioner obviously did not rely upon the disputed regulations
when it filed the subject returns untimely. In fact, the record
before us persuades us that petitioner filed those returns
relying on the belief that it would be taxed on the same taxable
base as that of a domestic corporation (i.e., gross income less
deductions). Given the relevant text, its legislative history,
the 1957 regulations, and the longstanding judicial precedents,
we have no doubt that taxpayers and their advisers would have
reasonably concluded immediately before the issuance of the
disputed regulations that the relevant text did not include a
timely filing requirement and would have reasonably concluded
upon the issuance of those regulations that such issuance was an
unreasonable attempt by the Secretary to circumvent the firmly
established legal terrain.25 In fact, as to petitioner, it did
almost everything that Congress envisioned as to foreign
25 We have found no authority, nor has respondent cited any,
to support respondent’s position that the relevant text contains
a timely filing requirement.
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