Joseph E. Lewis - Page 11

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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.           
               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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