Whether the Third Circuit erred in deferring to the IRS regulation under Chevron

QUESTIONS PRESENTED The Third Circuit, in conflict with the D.C., Ninth, and Federal Circuits, deferred to an IRS regulation under step two of Chevron even though the agency, in issuing the regulation, did not purport to exercise its expertise and provided no explanation for the rule other than that the agency sought “to conform” its regulation to the statute. The court then held, again in conflict with other circuits, that the IRS, in imposing more than $75,000,000 in tax liability on petitioner, was free to disregard its own published Revenue Ruling on the basis that a Revenue Ruling “is not a regulation and does not bind the IRS.” The questions presented are: 1. Whether the Third Circuit erred in deferring to the IRS regulation under Chevron. 2. Whether the Third Circuit erred in holding that the IRS is not bound by its own published Revenue Rulings.