OPINION
Goeke, Judge:Petitioner brought this case under section 60151 seeking review of respondent’s denial of relief from joint income tax liability for 1999. Respondent denied relief solely because petitioner did not request relief from joint tax liability within 2 years of the time respondent took a collection action against petitioner for the joint tax liability. Both parties have argued the validity of section 1.6015 — 5(b)(1), Income Tax Regs., which provides a 2-year limitations period after a collection action for request for relief under section 6015(f). For the reasons explained herein, we find the regulation to be inconsistent with and to be an impermissible interpretation of the statute.
Background
At the time the petition was filed, petitioner resided in Indiana.
During 1999 petitioner was married to Dr. Richard M. Chentnik, a dentist. Petitioner did not work outside the home in 1999.
Petitioner and Dr. Chentnik timely filed a joint Form 1040, U.S. Individual Income Tax Return, for the tax year 1999. The return reflected tax of $112,291.11 and an estimated tax penalty of $2,070.60. Included with the return was a payment of $115,550, resulting in a credit of $1,188.29, which was transferred to a Form 941, Employer’s Quarterly Federal Tax Return, of Dr. Chentnik for 1985.
Dr. Chentnik was arrested on June 8, 2000, and subsequently convicted of Medicare fraud. As a result of the conviction he was sentenced to Federal prison and incarcerated in Terre Haute, Indiana. He was incarcerated throughout 2003 and was released from prison to a halfway house in August 2004.
In the summer of 2002 petitioner moved to Logansport, Indiana, where she resided throughout 2003.
As a result of the Medicare fraud, respondent determined that the joint income tax liability for 1999 was understated. When no petition was filed after the issuance of a notice of deficiency, respondent assessed the following amounts against petitioner and Dr. Chentnik on August 12, 2002:
Item Amount
Income tax . $656,111
Sec. 6662 penalty . 131,222
Interest. 140,778
Another result of Dr. Chentnik’s Medicare fraud was the seizure of his assets in April 2000 by U.S. Marshals. As a result of the seizure, the U.S. Marshals Service transmitted a check in the amount of $2,592,022.68 to the center for Medicare and Medicaid services in November 2003.
On May 11, 2003, respondent issued separate letters to petitioner and Dr. Chentnik at the Logansport address, advising them that respondent was proposing a levy action to collect their joint income tax liability for 1999. Respondent considers the letter to petitioner to be a collection action, and we agree. These letters conformed with the notice requirements of section 6330. Although Dr. Chentnik was in prison, he advised petitioner that he would communicate with respondent regarding these notices, which he did. As a result of Dr. Chentnik’s communications with respondent’s Appeals Office, on February 9, 2004, two notices of determination were issued solely to Dr. Chentnik. In these notices of determination the Appeals Office determined that the joint account of petitioner and Dr. Chentnik should be moved into currently noncollectible status because “the taxpayer’s financial condition reflects that the account is noncollectible at this time. Therefore, serving a levy would cause undue hardship for the taxpayer at this time.”
In his correspondence with the Appeals Office, Dr. Chentnik advised that the Appeals officer should communicate with him directly, and he requested a form to seek relief for petitioner. He characterized petitioner as “the innocent spouse” in his correspondence with respondent. Dr. Chentnik died in a halfway house in October 2004.
Petitioner relied upon Dr. Chentnik to resolve the 1999 income tax issue and took no independent action regarding the collection letters from respondent until her income tax overpayment for 2005 was applied against the 1999 tax liability. After communicating with representatives from the Internal Revenue Service (IRS), petitioner filed Form 8857, Request for Innocent Spouse Relief, on June 23, 2006. Petitioner dated the Form 8857 June 9, 2006. In July 2006 respondent notified petitioner that relief for the year 2005 was not needed because she did not file a joint return for that year. On July 6, 2006, respondent issued a preliminary determination denying petitioner relief for 1999 because her claim was filed more than 2 years after the first collection action taken against her. Petitioner protested this determination, and her claim was assigned to an Appeals officer. The Appeals officer determined that petitioner is not entitled to relief under section 6015 because she did not file a claim within 2 years of the first collection activity. Because respondent denied petitioner’s claim as untimely, the substantive merits of her claim were never addressed. Respondent issued a notice of determination denying petitioner’s claim for relief on September 7, 2006. Petitioner then timely filed a petition in this Court.
Discussion
1. Joint Liability
In general, taxpayers filing joint Federal income tax returns are each responsible for the accuracy of their return and are jointly and severally liable for the entire tax liability due for the year of the return. Sec. 6013(d)(3). In certain circumstances, however, a spouse may obtain relief from joint and several liability by satisfying the requirements of section 6015.
Section 6015(a)(1) provides that a spouse who made a joint return may elect to seek relief from joint and several liability under section 6015(b) (dealing with relief from liability for an understatement of tax with respect to a joint return). Section 6015(a)(2) provides that a spouse who is eligible to do so may elect to limit that spouse’s liability for any deficiency with respect to a joint return under section 6015(c). Relief from joint and several liability under section 6015(b) and/or (c) is available only with respect to a deficiency for the year for which relief is sought. Sec. 6015(b)(1)(D) and (c)(1). Also, to qualify for relief under section 6015(b) or (c), the requesting spouse must make an election not later than 2 years after the Commissioner has begun a collection action. Sec. 6015(b)(1)(E) and (c)(3)(B). If relief is not available under either section 6015(b) or (c), an individual may seek equitable relief under section 6015(f), which we find is the basis of petitioner’s claim. Petitioner’s request for relief was submitted to respondent over 2 years after the May 11, 2003, collection action, and section 6015(b) and (c) is unavailable to her.
Section 6015(f) does not impose the 2-year limitations period. However, a 2-year limitations period for requesting relief under section 6015(f) was included in Notice 98-61, sec. 3.01(3), 1998-2 C.B. 756, 757, and subsequently in Rev. Proc. 2000-15, 2000-1 C.B. 447; Rev. Proc. 2003-61, 2003-2 C.B. 296; and section 1.6015-5, Income Tax Regs.
2. Rulemaking Under Section 6015
Rev. Proc. 2000-15, supra, was published on January 31, 2000, to provide guidance for taxpayers seeking relief from Federal tax liability under section 6015(f). Rev. Proc. 2000-15, sec. 4.01, 2000-1 C.B. at 448, sets forth seven general requirements that must be satisfied for any request for equitable relief under section 6015(f) to be considered by the Commissioner: (1) The requesting spouse filed a joint return for the year for which relief is sought; (2) relief is not available to the requesting spouse under section 6015(b) or (c); (3) the application for relief is no later than 2 years after the date of the Commissioner’s first collection activity after July 22, 1998; (4) except where an exception applies, the liability remains unpaid; (5) no assets were transferred between spouses as part of a fraudulent scheme; (6) no disqualified assets were transferred to the requesting spouse by the non-requesting spouse; and (7) the requesting spouse did not file the return with fraudulent intent.
Rev. Proc. 2003-61, supra, published on August 11, 2003, adds the threshold requirement that absent enumerated exceptions, the liability from which relief is sought must be attributable to an item of the nonrequesting spouse. Rev. Proc. 2003-61, supra, omits requirement No. 4 of Rev. Proc. 2000-15, supra, from its list of threshold requirements, revises the “knowledge or reason to know” factor for determining whether to grant equitable relief, and broadens the availability of refunds if equitable relief is granted under section 6015(f).
Sections 1.6015-0 through 1.6015-9, Income Tax Regs., were published on July 17, 2002 (effective July 18, 2002), pursuant to a mandate from Congress to promulgate regulations pertaining to section 6015 in general under section 6015(h) and procedures concerning requests for equitable relief under section 6015(f) in particular. Section 1.6015-4(a), Income Tax Regs., states that the IRS has discretion to grant equitable relief from joint and several liability when, considering all of the facts and circumstances, it would be inequitable to hold the requesting spouse jointly and severally liable. Section 1.6015-4(c), Income Tax Regs., refers taxpayers to Rev. Proc. 2000-15, supra,2 for guidance concerning the criteria to be used in determining whether it is inequitable to hold the requesting spouse jointly and severally liable under section 6015(f). Section 1.6015-5, Income Tax Regs., sets forth the time and manner for requesting relief and limits the time for requesting relief under section 6015(f) to 2 years from the first collection activity against the requesting spouse after July 22, 1998, in the same manner as the statutory restrictions on section 6015(b) and (c). In connection with the promulgation of the regulation, a Notice of Proposed Rulemaking and Public Hearing was issued on January 17, 2001, 66 Fed. Reg. 3888, and a public hearing was held on May 30, 2001. Subsequently, a Treasury Decision was issued promulgating the final regulation — T.D. 9003, 2002-2 C.B. 294.
3. Prior Tax Court Cases
Respondent asserts that this Court has previously accepted the 2-year period imposed on requests for relief under section 6015(f), citing Campbell v. Commissioner, 121 T.C. 290 (2003), and McGee v. Commissioner, 123 T.C. 314 (2004). In Campbell, we determined that an offset of a subsequent year overpayment to the joint liability in question was a collection activity initiating the 2-year period set forth in Rev. Proc. 2000-15, sec. 5, 2000-1 C.B. at 449. The taxpayer did not raise the permissibility of imposing a limitations period for requests for relief under section 6015(f). The sole issue before the Court was whether the application of the overpayment constituted a collection action. Campbell v. Commissioner, supra at 291.
In McGee v. Commissioner, supra, we held that the Commissioner’s failure to include an explanation of the taxpayer’s rights under section 6015 in the notice of the application of a subsequent year overpayment to the joint liability in question was a violation of the Internal Revenue Service Restructuring and Reform Act of 1998 (rra 1998), Pub. L. 105-206, sec. 3501(b), 112 Stat. 770, and accordingly, it was inequitable and an abuse of discretion for the Commissioner to apply the 2-year limitations period of Rev. Proc. 2000-15, supra. We specifically stated in McGee v. Commissioner, supra at 320 n.4, that we did not reach the question raised by the taxpayer as to whether it was inappropriate to have a strict limitations period apply to section 6015(f).
The Court has not yet addressed the issue of whether the imposition of the 2-year limitations period in section 1.6015-5(b)(1), Income Tax Regs., is valid. See Campbell v. Commissioner, supra; McGee v. Commissioner, supra; Nelson v. Commissioner, T.C. Memo. 2005-9; Durham v. Commissioner, T.C. Memo. 2004-184; Hall v. Commissioner, T.C. Memo. 2004-170.
4. Standard of Review
We need not revisit whether the proper standard of review of the Commissioner’s regulations is the standard of Natl. Muffler Dealers Association, Inc. v. United States, 440 U.S. 472 (1979), or the standard set forth in Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 842-843 (1984), insofar as there may be a difference between them. See Swallows Holding, Ltd. v. Commissioner, 515 F.3d 162 (3d Cir. 2008), vacating and remanding 126 T.C. 96 (2006). Following Golsen v. Commissioner, 54 T.C. 742 (1970), affd. 445 F.2d 985 (10th Cir. 1971), we apply the law of the Court of Appeals to which an appeal in the case would normally lie. Section 1.6015-5, Income Tax Regs., was issued under both a general grant of authority under section 7805 and a specific grant of authority under section 6015(h). T.D. 9003, 2002-2 C.B. 294. The U.S. Court of Appeals for the Seventh Circuit has held that regulations issued under general or specific authority of the IRS to promulgate necessary rules are entitled to Chevron deference. Bankers Life & Cas. Co. v. United States, 142 F.3d 973, 979, 982-983 (7th Cir. 1998); see also Khan v. United States, 548 F.3d 549 (7th Cir. 2008) (reviewing a general authority tax regulation under Chevron); Square D Co. & Subs. v. Commissioner, 438 F.3d 739, 745 (7th Cir. 2006) (reviewing a regulation issued pursuant to an express delegation of authority under Chevron), affg. 118 T.C. 299 (2002). Accordingly, we will follow the Chevron standard in this analysis.3
In Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., supra at 842-843, the Supreme Court created a two-prong test: (1) If Congress has directly spoken to the precise question at issue, we give effect to the unambiguously expressed intent of Congress. If the statute is ambiguous, then we continue to the second prong: (2) If the statute is ambiguous with respect to the specific issue, we determine whether the regulation is a permissible construction of the statute.4 See also Bankers Life & Cas. Co. v. United States, supra at 983.
5. Whether Congress Has Spoken on the Issue
Respondent argues that section 1.6015-5(b)(l), Income Tax Regs., passes the first prong of Chevron because section 6015(f) is silent with respect to the period of limitations for seeking relief. Consequently, respondent maintains that promulgating a regulation that prescribes a period of limitations is a permissible exercise of the authority delegated to the Secretary.
Section 6015(f) provides:
SEC. 6015(f). Equitable Relief. — Under procedures prescribed by the Secretary, if—
(1) taking into account all the facts and circumstances, it is inequitable to hold the individual liable for any unpaid tax or any deficiency (or any portion of either); and
(2) relief is not available to such individual under subsection (b) or (c), the Secretary may relieve such individual of such liability.
While it is clear that section 6015(f) does not set forth a period of limitations, we disagree that the statute is silent as to whether a period of limitations applies to subsection (f). The first prong of Chevron requires the Court to employ the traditional tools of statutory construction to try to determine the intent of Congress. NLRB v. United Food & Commercial Workers Union, Local 23, 484 U.S. 112, 123 (1987); INS v. Cardoza-Fonseca, 480 U.S. 421, 447-448 (1987). “It is a central tenet of statutory construction that, when interpreting any one provision of a statute, the entire statute must be considered.” Fla. Country Clubs, Inc. v. Commissioner, 122 T.C. 73, 79 (2004), affd. 404 F.3d 1291 (11th Cir. 2005); see also Lexecon Inc. v. Milberg Weiss Bershad Hynes & Lerach, 523 U.S. 26, 36 (1998). Accordingly, we must consider the significance of the omission of a deadline for requesting relief in section 6015(f) in the light of section 6015 as a whole.
To be eligible for relief under section 6015(b) or (c), the statute explicitly provides that the requesting spouse must elect relief not later than the date that is 2 years after the date the Secretary has begun collection activities with respect to the individual making the election. Sec. 6015(b)(1)(E) and (c)(3)(B). However, there is no such limitation in section 6015(f). “‘It is generally presumed that Congress acts intentionally and purposely’ when it ‘includes particular language in one section of a statute but omits it in another’”. City of Chicago v. Envtl. Def. Fund, 511 U.S. 328, 338 (1994) (quoting Keene Corp. v. United States, 508 U.S. 200, 208 (1993)). We find that by explicitly creating a 2-year limitation in subsections (b) and (c) but not subsection (f), Congress has “spoken” by its audible silence. Because the regulation imposes a limitation that Congress explicitly incorporated into subsections (b) and (c) but omitted from subsection (f), it fails the first prong of Chevron.
Furthermore, under section 6015(f)(2), the equitable remedy is available only “if * * * relief is not available to such individual under subsection (b) or (c)”. That is, by its very nature the equitable relief under subsection (f) is to be broader than relief under subsection (b) or (c). In order for subsection (f) relief to be more broadly available than under the 2-year filing rule of subsections (b)(1)(E) and (c)(3)(B), a deadline under subsection (f) would need to be longer than 2 years. Clearly, the timing of the request for relief is not the only possible element by which subsection (f) relief would be broader than that of subsection (b) or (c). For example, the individual might have signed the return knowing of the understatement (and thus falling afoul of subsection (b)(1)(C)) but might have been a victim of spousal abuse so that it could be inequitable to hold that individual liable. An equitable remedy that had a 2-year bar but allowed relief to the abused spouse would be more liberal than subsection (b), despite the time limit. Accordingly, a Congress intending broader relief under subsection (f) might be nonetheless content with the same timing rule as for subsections (b) and (c). However, the Congress that enacted section 6015 made it clear on the face of the statute that one difference between subsection (f) and subsections (b) and (c) was the time for requesting relief, because it established a 2-year deadline in subsections (b) and (c) and imposed no deadline in subsection (f). In fact, the timing distinction is one of the only three differences between subsections (b) and (f) that are explicit in the statute.5 Had Congress intended a 2-year period of limitations for equitable relief, then of course it could have easily included in subsection (f) what it included in subsections (b) and (c). However, Congress imposed no deadline, yet the Secretary prescribed a period of limitations identical to the limitations Congress imposed under section 6015(b) and (c).
While subsection (f) demonstrates a clear congressional attempt to address inequitable situations not addressed by subsections (b) and (c), apart from the absence of a time limit the statute does not define those situations. Rather, Congress provides that the Secretary consider all the facts and circumstances and determine whether equitable relief is appropriate. Congress also provided jurisdiction to this Court to determine whether the taxpayer is entitled to relief under section 6015(f). Tax Relief and Health Care Act of 2006 (trhca), Pub. L. 109-432, div. C, sec. 408, 120 Stat. 3061. Under section 1.6015-5(b)(l), Income Tax Regs., the Secretary must deny section 6015(f) relief where the individual seeking relief failed to meet a 2-year time limit, without considering circumstances such as abuse, intimidation, or misrepresentation, which might have contributed to or caused the request for relief to be delayed.
We do not believe that Congress intended the circumvention of the analysis required by section 6015(f) that results from the restrictions of section 1.6015-5(b)(l), Income Tax Regs. In subsection (f), Congress designed a general remedy to meet inequitable situations not specifically addressed in subsections (b) and (c). The general nature of the remedy in subsection (f) implies an intent to address difficult marital circumstances too subject to variation for more specificity. The Secretary’s adoption of the very timing rule that Congress had imposed on subsections (b) and (c) but had specifically omitted from subsection (f) runs directly contrary to the nature of the relief provided by Congress.6
However, for the sake of argument, we consider whether section 1.6015 — 5(b)(1), Income Tax Regs., is a permissible construction of the statute in the event that the absence of a 2-year limitations period in section 6015(f) is construed as an ambiguity.
6. Whether the 2-Year Limitations Period Is Permissible
a. Congress’s Intent in Omitting a Limitations Period
For the same reasons we believe section 1.6015 — 5(b)(1), Income Tax Regs., fails the first step of the Chevron test, we find that the regulation is impermissible because it is contrary to the intent of Congress. Section 6015(f) is a recognition that the circumstances of joint tax liability can be complex and difficult. Such circumstances can lead to unfair results under section 6013(d)(3) that may not be remedied under section 6015(b) or (c). Therefore, Congress provided section 6015(f) as a last resort to avoid potential harsh circumstances imposed upon one spouse in a joint return situation, and Congress specifically omitted a temporal limitation on a request for equitable relief. Because the failure to comply with a 2-year limitations period does not necessarily indicate that a taxpayer should not be eligible for equitable relief, to deny a taxpayer relief under section 6015(f) for failure to comply with a limitation rule that would also prevent the taxpayer from obtaining relief under section 6015(b) or (c) is impermissible.7
b. Contrasting Timing Rules Under Section 66(c)
Section 1.6015-5(b)(l), Income Tax Regs., reflects a one-size-fits-all approach for both traditional and equitable relief that the Secretary did not employ when promulgating regulations under a companion statute — section 66(c). The different approach used in the regulations under section 66(c) underscores the unreasonableness of the rule under consideration here.
Section 66 provides for the treatment of “community income” in community property States when the spouses do not file jointly. This section, amended in 1984 by the Deficit Reduction Act of 1984, Pub. L. 98-369, sec. 424(b), 98 Stat. 801, allocates the income between the spouses, and its subsection (c), embodying relief referred to as “traditional relief”, creates exceptions where “taking into account all facts and circumstances, it is inequitable” to follow the general rule — the same language that appears in section 6015(b)(1)(D). At the time, Congress noted in legislative history that the availability of such relief might take into account “whether the defense was promptly raised”.8
An “equitable relief” provision was added to section 66(c) by RRA 1998 sec. 3201(b), 112 Stat. 739, in the same section of RRA 1998 that enacted section 6015(f). To the very end of section 66(c), RRA 1998 added this sentence:
Under procedures prescribed by the Secretary, if, taking into account all the facts and circumstances, it is inequitable to hold the individual liable for any unpaid tax or any deficiency {or any portion of either) attributable to any item for which relief is not available under the preceding sentence, the Secretary may relieve such individual of such liability. [Emphasis added.]
The language emphasized above, enacted in RRA 1998 sec. 3201(b), is identical to language added by RRA 1998 sec. 3201(a), 112 Stat. 734, to the statute relevant here — section 6015(f).
In 2002 the Secretary proposed regulations under section 66(c) that included section 1.66-4(g)(2), Proposed Income Tax Regs., 67 Fed. Reg. 2845 (Jan. 22, 2002), entitled “Time period for filing a request for relief”. This proposed regulation had two relevant subdivisions: The first was “(i) Specific relief”, and it included a 6-month cutoff provision; and the second was “(ii) Equitable relief”, and it included no cutoff.9
In 2003 the Secretary announced the promulgation of the final regulations, T.D. 9074, 2003-2 C.B. 601, 603, and explained this timing difference by reference to the legislative history:
One commentator suggested that the time limitations set forth in § 1.66-4 for requesting relief under section 66(c) are not supported by the language of section 66(c). Although the statute itself does not set forth time limitations on the filing of a request for relief, the time limitations in the proposed regulations are supported by the [1984] legislative history of the traditional relief provision of section 66(c). Specifically, the House Report explaining traditional relief under section 66(c) states that, in making the determination as to relief, the IRS should consider (among other things) “whether the defense was promptly raised so as to prevent the period of limitations from running on the other spouse.” H.R. Rep. 98-432, pt. 2, at 1501 (1984). Thus, the final regulations retain the time limitations set forth in the proposed regulations. In contrast, § 1.66-4(j)(2)(ii) sets forth timing requirements for requesting equitable relief that are broader than the requirements applicable to traditional relief because the legislative history of the equitable relief provision does not contain similar timing requirements. Therefore, a requesting spouse who does not meet the time limitations to request traditional relief may be eligible to request equitable relief. [Emphasis added.]
The Secretary was thus alert to an arguably subtle distinction not even reflected in the language of section 66(c), but only in its legislative history. Thus informed by the legislative history, the Secretary established, by regulation, a cutoff for requesting “traditional relief” under section 66(c) (because the legislative history suggested a need for making such requests “promptly * * * so as to prevent the period of limitations from running on the other spouse”), but it made a distinction and declined to establish a deadline for requesting equitable relief (because the legislative history on the equitable relief provision in section 66(c) was silent as to any timing issue). While the Secretary imposed a 2-year deadline on requesting equitable relief under section 66(c) in Rev. Proc. 2000-15, secs. 4.01(3) and 5, 2000-1 C.B. at 448, 449, and Rev. Proc. 2003-61, secs. 4.01(3) and 5, 2003-2 C.B. at 297, 299, this deadline is four times as long as the 6-month deadline available for traditional relief under section 66(c).
For section 6015, on the other hand, one need not be so alert to note the distinction: it appears not merely in legislative history but in the words of the statute itself; and the distinction is reflected not merely in one subtle adverb (“promptly”) but in explicit deadlines in section 6015(b) and (c), and no deadline in section 6015(f). However, despite this patent distinction between the traditional and equitable relief provisions under section 6015, the same department that had sensibly promulgated different regimes for traditional and equitable relief under section 66(c) established, without explanation, one timing rule for all relief under section 6015, whether traditional or equitable.
The Secretary should have been no less alert to the timing distinctions explicit in section 6015 than he was to the timing distinctions implicated by the word “promptly” in the legislative history to section 66(c). In implementing section 6015 the Secretary should have understood (as he understood when section 66(c) was under consideration) that the statutory silence about deadlines in section 6015(f) was meaningful, and he should have inferred that the procedures to be prescribed under section 6015(f) should not contain the same deadline that Congress imposed in subsections (b) and (c) but declined to impose in subsection (f).
In 1998 Congress evidently intended that taxpayers have two kinds of remedies — traditional remedies (sections 66(c)(4) and 6015(b) and (c)) with stricter deadlines, and equitable remedies (sections 66(c) (flush language) and 6015(f)) with looser procedures to be set up by the Secretary (as he did in the case of section 1.66 — 4(j)(2)(ii), Income Tax Regs.). But given the explicit congressional purpose, it was not reasonable for the Secretary to adopt for the equitable remedy of section 6015(f) a deadline that was identical to, and no looser than, the 2-year deadline Congress had enacted for the traditional remedy in section 6015(b).10
c. Swallows Holding Ltd. Distinguished
Respondent argues that this case is analogous to Swallows Holding, Ltd. v. Commissioner, 515 F.3d 162 (3d Cir. 2008), where the court found that the Secretary was justified in promulgating a regulation that prescribed a filing deadline where the statute was ambiguous. However, because of the equitable test in section 6015(f) and the statutory contrast between section 6015(b) and (c) and section 6015(f), this case is distinguishable from Swallows Holding, Ltd. Although both cases involved the imposition by regulation of a temporal limitation on filing, the similarity ends there; and the statutory framework is completely different regarding the nature of the relief afforded.
Swallows Holdings, Ltd. addressed section 1.882-4(a)(3)(i), Income Tax Regs., which was promulgated pursuant to section 882(c)(2) and prescribes the manner in which a return should be filed. That regulation sets forth an 18-month filing deadline for foreign businesses claiming deductions against income from business activities conducted in the United States. The Court of Appeals for the Third Circuit held that prescribing a filing deadline was appropriate. Respondent argues that the instant case is analogous to that situation. However, section 882(c) sets forth a rule regarding the allowance of deductions and credits, not a test for inequity from which a 2-year limit was specifically omitted in contrast to the related preceding subsections of the statute.
d. A Better Analogy: The Bureau of Prisons Regulatory Cases
We find the present regulatory controversy to be analogous to those in several appellate cases involving the conflict between the Bureau of Prisons (bop) regulations codified at 28 C.F.R. sections 570.20 and 570.21 and the congressional intent articulation in 18 U.S.C. section 3621(b). See Wedelstedt v. Wiley, 477 F.3d 1160 (10th Cir. 2007); Levine v. Apker, 455 F.3d 71 (2d Cir. 2006); Fults v. Sanders, 442 F.3d 1088 (8th Cir. 2006); Woodall v. Fed. Bureau of Prisons, 432 F.3d 235 (3d Cir. 2005). The controversy in those cases involved the eligibility of prisoners for Community Correctional Center (ccc) placement. Title 28 C.F.R. section 570.21(a) (2008) provides that the BOP “will designate inmates to community confinement only * * * during the last ten percent of the prison sentence being served, not to exceed six months.” The BOP identified 18 U.S.C. section 3621(b) as authorizing this categorical exercise of discretion and viewed the promulgation of a categorical rule as permissible under Lopez v. Davis, 531 U.S. 230 (2001). The Courts of Appeals in the cases cited above found the bop regulations invalid under Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984). The Court of Appeals for the Third Circuit explained in Woodall v. Fed. Bureau of Prisons, supra at 249:
we axe faced, with a statute providing that the BOP must consider several factors in CCC placement, and a regulation providing that the agency may not consider those factors in full. The conflict between the regulations and the statute seems unavoidable.
While 18 U.S.C. section 3621(b), like section 6015(f), uses the discretionary term “may” with respect to the BOP’s authority to select the place of imprisonment,11 the courts cited above found that this does not give the BOP discretion to decline to consider certain factors before making that decision. As the Court of Appeals in Woodall v. Fed. Bureau of Prisons, supra at 245, explains:
The government argues that the use of the word “may” at the beginning of § 3621(b), rather than “shall,” is determinative in proving that consideration of the factors is essentially optional. We believe that this narrow reading ignores the context of the statute. See Deal v. United States, 508 U.S. 129, 132, 113 S.Ct. 1993, 124 L.Ed.2d 44 (1993) (noting the “fundamental principle of statutory construction . . . that the meaning of a word cannot be determined in isolation, but must be drawn from the context in which it is used”). A commonsense reading of the text — especially when combined with the legislative history — makes clear that the BOP is required to consider each factor. “May” refers to the ability of the BOP to make ultimate placement designations, not to the § 3621 factors. The word “may” is a full fifty words away from the considerations, and its effect is separated from the factors with a comma. [Emphasis added.]
We find section 1.6015-5(b), Income Tax Regs., to be a similar attempt to limit factors for consideration in making the mandated determination under section 6015(f) in a way that is contrary to the intent of Congress. The regulation would enable the Secretary to avoid consideration of “all the facts and circumstances” in section 6015(f) cases by imposing a 2-year period of limitations, the same period of limitations that Congress specifically applied to section 6015(b) and (c) but omitted from subsection (f).12 However, a commonsense reading of section 6015 is that the Secretary has discretion to grant relief under section 6015(f) but may not shirk his duty to consider the facts and circumstances of a taxpayer’s case by imposing a rule that Congress intended to apply only to subsections (b) and (c). See also Estate of Roski v. Commissioner, 128 T.C. 113, 128-129 (2007) (finding that where the Commissioner is required to exercise discretion, the Commissioner may not avoid this responsibility by imposing a universal rule that is contrary to the intent of Congress).
Congress’ intent that the Secretary not have unfettered discretion in applying section 6015(f) is evidenced by its reinstatement of the Court’s jurisdiction to review the Secretary’s determinations in nondeficiency cases under section 6015(f). In 2006 the Court of Appeals for the Ninth Circuit overturned a decision of this Court and held that the Tax Court does not have jurisdiction to review the Secretary’s denial of relief under section 6015(f) in a case where no deficiency has been asserted. Commissioner v. Ewing, 439 F.3d 1009 (9th Cir. 2006), revg. 118 T.C. 494 (2002) and vacating 122 T.C. 32 (2004). Soon after, the Court of Appeals for the Eighth Circuit took the same position. Bartman v. Commissioner, 446 F.3d 785 (8th Cir. 2006), affg. in part and vacating T.C. Memo. 2004-93. Accordingly, the Court reversed its prior position and issued Billings v. Commissioner, 127 T.C. 7 (2006), construing section 6015(e) as not giving the Court jurisdiction over nondeficiency petitions filed under section 6015(f).
In response, in the TRHCA div. C, sec. 408, Congress reinstated our jurisdiction to review the Commissioner’s determinations under section 6015(f) where no deficiency has been asserted.
While a taxpayer’s delay in applying for relief under section 6015(f) is a factor to be considered in applying the “all the facts and circumstances” test of section 6015(f), the Secretary must be reasonable when creating restrictions that categorically exclude taxpayers from relief. For example, in Rev. Proc. 2003-61, supra, the Secretary imposes a requirement that the requesting spouse must not have transferred property to the nonrequesting spouse as part of fraudulent scheme by the spouses in order to be eligible for relief under section 6015(f). However, unlike restrictions that exclude taxpayers who request relief after engaging in fraudulent activities, whether a taxpayer requests relief within 2 years of the IRS’ first collection activity does not necessarily indicate whether it would be equitable to grant the taxpayer relief. While we need not decide today whether any temporal limitation would be appropriate, it is clear from the omission of a 2-year limitations period in section 6015(f) that such a 2-year limitations period is impermissible.
e. No Tacit Congressional Approval
Finally, respondent argues that under Hanover Ins. Co. v. Commissioner, 65 T.C. 715, 719-720 (1976), regulations and interpretations by the Secretary that have continued without substantial change, applying to unamended or substantially reenacted statutes, are deemed to have received congressional approval and have the effect of law. Respondent argues that the fact that Congress has amended section 6015(f) twice since the Secretary first imposed the 2-year limitations period shows that Congress has tacitly approved of the limitation. See Consolidated Appropriations Act, 2001, Pub. L. 106-554, app. G, sec. 313, 114 Stat. 2763A-640 (2000); TRHCA div. C, sec. 408.
While we agree with this general rule, we do not believe it applies here. First, the regulations in Hanover and the cases cited therein had been in place for at least 20 years, sometimes as long as 39 years. Hanover Ins. Co. v. Commissioner, supra at 716; see also United States v. Correll, 389 U.S. 299, 302 n.10 (1967); Fribourg Navigation Co. v. Commissioner, 383 U.S. 272, 279-280 nn.4&5 (1966); Helvering v. Winmill, 305 U.S. 79, 82 (1938). Furthermore, regarding the regulations or interpretations at issue in Hanover and Correll, there was evidence that Congress had considered and rejected arguments against them. See United States v. Correll, supra at 305 n.20 (Congress heard pleas for a change in the disputed rule but did not make the requested change); H. Conf. Rept. 99-841 (Vol. II), at 11-357 (1986), 1986-3 C.B. (Vol. 4) 1, 357 (explicitly citing the regulation disputed in Hanover).
While 10 years may be long enough to treat Congress’ inaction as tacit approval in some cases, such as where Congress is clearly aware of the disputed regulation and amends a portion of the related statute without superseding the regulation, the Commissioner has provided the Court with no indication that the application of the 2-year limitations period has been brought to Congress’ attention or that Congress has considered whether the limitations period is valid.
It was not until 2003 that the Court first upheld the Commissioner’s disallowance of relief under section 6015(f) because of the 2-year limitations period, Campbell v. Commissioner, 121 T.C. 290 (2003), and the Court has done so on only two other occasions, Durham v. Commissioner, T.C. Memo. 2004 — 184; Hall v. Commissioner, T.C. Memo. 2004-170. In each case the requesting spouse appeared pro se, failed to challenge the validity of the regulation (or may not have been aware that it existed), and did not appeal the Court’s decision. In Durham we noted that the Court was not expressing an opinion on the validity of the rule, and the taxpayer would not have been entitled to relief even if she had satisfied the 2-year limitations period. In Hall we did not discuss the validity of the 2-year limitations period.
This situation is far different from the situation that prompted Congress to amend section 6015(f) in 2006. As discussed above, before Congress amended section 6015(e) to give the Court jurisdiction to review denial of relief under section 6015(f), the Court of Appeals for the Ninth Circuit overturned a decision of this Court on the issue, and this Court subsequently reversed its prior position. Commissioner v. Ewing, supra; Billings v. Commissioner, supra. The TRHCA was enacted less than a year after the Court of Appeals held that the Court did not have jurisdiction in such cases, and there is no evidence that the 2-year limitations period in section 1.6015 — 5(b)(1), Income Tax Regs., had been brought to Congress’ attention. It seems that before petitioner raised the issue in this case, this rule was given very little attention in any forum. Accordingly, we do not believe that Congress’ failure to overturn section 1.6015-5(b)(l), Income Tax Regs., amounts to a tacit approval of the 2-year limitations period.
7. Conclusion
Accordingly, we hold that section 1.6015 — 5(b)(1), Income Tax Regs., is an invalid interpretation of section 6015, and respondent abused his discretion by failing to consider all facts and circumstances in petitioner’s case. Further proceedings will be needed to fully determine petitioner’s 1999 tax liability.
On the basis of the foregoing,
An appropriate order will be issued.
Reviewed by the Court.
Colvin, Cohen, Wells, Foley, Vasquez, Marvel, Haines, Wherry, Kroupa, GustaFson, and Paris, JJ., agree with this majority opinion. Gale, J., dissents.Unless otherwise indicated, all section references are to the Internal Revenue Code.
Rev. Proc. 2000-15, 2000-1 C.B. 447, was superseded by Rev. Proc. 2003-61, 2003-2 C.B. 296.
Respondent argues in the alternative that Rev. Proc. 2003-61, supra, is entitled to Skidmore deference, because Congress specifically directed the Secretary to prescribe procedures pertaining to requests for equitable relief under sec. 6015(f). See Skidmore v. Swift & Co., 323 U.S. 134 (1944). We find the appropriate test to be that of Chevron, not Skidmore. See Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 842-843 (1984). Therefore, our prior discussion is dispositive.
The Court of Appeals for the Seventh Circuit has interpreted the second prong of the Chevron test as a question of “the reasonableness of the regulation”. Bankers Life & Cas. Co. v. United States, 142 F.3d 973, 983 (7th Cir. 1998). However, we find that sec. 1.6015-5(b)(l), Income Tax Regs., is neither a permissible construction of the statute nor a reasonable regulation, and our analysis is the same under either standard.
The three conditions that are present in sec. 6015(b) but are absent from sec. 6015(f) are: (1) The requirement in sec. 6015(b)(1)(B) that there be an understatement of tax; (2) the requirement in sec. 6015(b)(1)(C) that the individual did not know of the understatement; and (3) the requirement of sec. 6015(b)(1)(E) that the election be filed within 2 years of collection activity. Sec. 1.6015-5, Income Tax Regs., treats only the third of these requirements (the 2-year limitation) as a condition that should also be imposed on sec. 6015(f). While Rev. Proc. 2003-61, supra, treats the second condition (the individual’s lack of knowledge) as a factor to be considered when determining whether relief should be granted under sec. 6015(f), it is not a threshold or determinative factor.
The legislative history mirrored the statute:
The conferees intend that such authority be used where, taking into account all the facts and circumstances, it is inequitable to hold an individual liable for all or part of any unpaid tax or deficiency arising from a joint return. * * * [H. Conf. Kept. 105-599, at 254 (1998), 1998-3 C.B. 747, 1008.]
Petitioner relied upon her spouse to address their joint tax problems. This reliance initially appeared to result in a successful resolution, and she took no further action after his death.
H. Rept. 98-432 (Part 2), at 1503 (1984). As is noted below, the congressional reference to acting “promptly” influenced Treasury’s later drafting of the regulations. However, no regulations were promulgated under sec. 66 until after the statute was amended in 1998.
In the announcement of the proposed regulations under sec. 66(c), 67 Fed. Reg. 2841 (Jan. 22, 2002), the Secretary observed that the relief provided in sec. 66(c) “is analogous to the relief provision in section 6015(b) * * * [and] section 6015(f)”. It explained that “a requesting spouse seeking [traditional] relief from the operation of community property law under sec. 66(c) must request such relief no later than 6 months before the statute of limitations on assessment of section 6501 expires with regard to the nonrequesting spouse”, id. at 2842, but that a “spouse seeking equitable relief * * * may seek relief on or after the date the return for such year is filed”, id. at 2843.
The parties both assert that a taxpayer seeking sec. 6015(f) relief more than 2 years after the initial collection action cannot obtain an extension of time under sec. 301.9100-3, Proced. & Admin. Regs. We accept their mutual position in this case because in the light of respondent’s position any effort by petitioner to apply for relief under sec. 301.9100-3, Proced. & Admin. Regs., would be fruitless. An agency’s interpretation of its own regulation is entitled to “controlling weight unless it is plainly erroneous or inconsistent with the regulation.” Bowles v. Seminole Rock & Sand Co., 325 U.S. 410, 414 (1945); Philips Petroleum Co. v. Commissioner, 101 T.C. 78, 97 (1993), affd. without published opinion 70 F.3d 1282 (10th Cir. 1995).
In addition, the complex procedures required for requesting an extension under sec. 301.9100-3(e), Proced. & Admin. Regs., would, for many or most claimants under sec. 6015(f), be daunting to the point of impracticability. To request an extension, a taxpayer would have to file affidavits and information as required by sec. 301.9100-3(e)(2) through (4), Proced. & Admin. Regs., and, pursuant to sec. 301.9100-3(e)(5), Proced. & Admin. Regs., would have to meet the requirements of Rev. Proc. 2007-1, 2007-1 C.B. 1, for ruling requests. Those requirements include malting the payment of a $625 “user fee” and providing the information requested in the 18 items of information requested in Rev. Proc. 2007-1, sec. 7.01. We agree that an extension under section 301.9100-3, Proced. & Admin. Regs., is not available — either legally or practically — to a sec. 6015(f) claimant.
18 U.S.C. sec. 3621(b) (2006) provides:
(b) Place of Imprisonment. — The Bureau of Prisons shall designate the place of the prisoner’s imprisonment. The Bureau may designate any available penal or correctional facility that meets minimum standards of health and habitability established by the Bureau, whether maintained by the Federal Government or otherwise and whether within or without the judicial district in which the person was convicted, that the Bureau determines to be appropriate and suitable, considering — [five specific factors.] [Emphasis added.]
Sec. 6015(f) requires the Secretary to take into account “all the facts and circumstances” in deciding whether to grant equitable relief. However, we do not decide at this time whether a period of limitations that was longer than 2 years would run afoul of this requirement.