ABOLISHING THE SHELTER OF AMBIGUITY: A NEW FRAMEWORK FOR TREASURY REGULATION DEFERENCE CLARIFYING CHEVRON AND BRAND X
Sebastian Watt
ABSTRACT
In the Supreme Court’s 2011 decision in Mayo Foundation for Medical Education and Research v. United States the Court held that Treasury Regulations (“TRs”) interpreting the Internal Revenue Code (“I.R.C.”) are entitled to the same administrative deference accorded to other agency regulations, as set out in Chevron, USA., Inc. v. Natural Resource Defense Counsel. In the immediate wake of the Court’s clarification as to the proper standard for TRs, the circuit courts of appeals divided over a regulation interpreting a statute of limitations provision, I.R.C. § 6501(e)(1)(A) (“Section 6501”). The Supreme Court granted certiorari in 2012 in Home Concrete & Supply v. United States to resolve the split. The question before the Court was whether a prior Supreme Court decision, Colony v. Commissioner, (1) conclusively decided that its interpretation of section 6501 was the only reasonable one, thus foreclosing alternative agency regulation, or (2) represented one possible interpretation, thus allowing future alternative agency regulation. The Court concluded that the Colony found section 6501 unambiguous, and thus invalidated the agency regulation.