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is reasonable if it “harmonizes with the plain language of the
statute, its origin, and its purpose.” Id. at 477.
Following its decision in National Muffler, the Supreme
Court decided Chevron U.S.A., Inc. v. Natural Res. Def. Council,
Inc., 467 U.S. 837 (1984). In Chevron, the Court stated that
when reviewing an agency’s regulatory implementation of a
statute, we look first to whether Congress has directly spoken to
the precise question at issue. Id. at 842. If congressional
intent is clear, our inquiry ends, and we apply the unambiguously
expressed intent of Congress. Id. at 842-843. However, if
congressional intent is not clear, the question is whether the
regulation is based on a permissible construction of the statute.
Id.
This Court has, on a number of occasions, considered
Chevron’s effect on National Muffler and the review of
interpretive tax regulations. See, e.g., Swallows Holding, Ltd.
v. Commissioner, 126 T.C. 96, 131 (2006) (discussing the review
of Federal tax regulations under National Muffler in relation to
Chevron and stating that Chevron restated National Muffler in a
more practical two-part test); Cent. Pa. Sav. Association & Subs.
v. Commissioner, 104 T.C. 384, 392 (1995) (same) (noting the
Supreme Court’s application of National Muffler after Chevron).
Whether our analysis is guided by National Muffler or by Chevron,
the result would be the same.
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