Swallows as it Might Have Been: Regulations Revising Case Law

Abstract:     
In Swallows Holding Ltd. v. Commissioner, the Tax Court invalidated a general-authority regulation under section 7805 of the Internal Revenue Code involving return filing by some foreign corporations. A previous article by the author, "Swallows Holding as It Is: The Distortion of National Muffler," maintained that the regulation is consistent with prior case law and should be upheld under the National Muffler standard of deference. This article uses Swallows to explore Chevron and Brand X issues as to interpretive tax regulations generally. It maintains that Chevron typically should apply to challenges to those regulations (and specifically should apply to the challenge to the Swallows regulation) and Brand X should apply when tax regulations revise prior case law rules.

Keywords: Tax regulations

Accepted Paper Series