Replies to post #111157 on Lehman Brothers Financial SA (LEHNQ)

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It's important to clarify that Chevron deference likely didn't directly determine that discharged debt is considered taxable income. Here's why:

Tax Code and Regulations: The Internal Revenue Code (IRC) defines taxable income and sets the framework for taxation. The IRS issues regulations to interpret the code and provide guidance.
Chevron Deference: This legal principle applies when courts review interpretations of ambiguous laws by federal agencies like the IRS. If a relevant IRS regulation regarding discharged debt existed and was challenged in court, Chevron deference might have come into play.
Possible Scenario:

Let's say the IRS issued a regulation stating that discharged debt generally counts as taxable income.
If a taxpayer challenged this regulation in court, arguing the IRC didn't explicitly mention discharged debt as income, Chevron deference could be relevant.
Under Chevron, the court would likely defer to the IRS regulation as long as it found a reasonable basis for considering discharged debt as income within the framework of the IRC.
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