Opinion ID: 2995339
Heading Depth: 4
Heading Rank: 2

Heading: We examine the reasonableness of the

Text: regulation. If the regulation is a reasonable reading of the statute, we give deference to the agency’s interpretation. Bankers Life & Cas. Co. v. United States, 142 F.3d 973, 983 (7th Cir. 1998). In the present case, however, no one is arguing that the regulations the Commissioner has promulgated are invalid or that they are inconsistent with the text of the Code. The issue is instead whether the Commissioner’s interpretation of his own regulations is a reasonable one. And as to that, there is no question but that the interpretive methodologies he has used have been informal. The interpretation with which we are concerned has emerged inferentially in the way the IRS has applied the rules to different cases and it has appeared through the litigating positions the Service has taken. Both the informality of this interpretation and the context in which it has arisen persuade us that full Chevron deference is not appropriate here. Mead expressly disapproved of the exercise of such deference for the customs regulations that were at issue there, in part because of the boot- strapping that could otherwise occur. With full Chevron deference, agencies could pass broad or vague regulations through notice-and-comment procedures, and then proceed to create rules through ad hoc interpretations that were subject only to limited judicial review. All told, we think this is a clear case for the flexible approach Mead described, relying on the Supreme Court’s earlier decision in Skidmore v. Swift & Co., 323 U.S. 134 (1944), and we thus proceed on that basis.