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Congress came to think that other sorts of delays called for
relief from the relentless accrual of interest. The 1996
amendment (“new section 6404(e)”) therefore empowered the
Commissioner to abate interest caused by any “unreasonable error
or delay by an officer or employee of the Internal Revenue
Service * * * in performing a ministerial or managerial act.”
Taxpayer Bill of Rights 2, Pub. L. 104-168, sec. 301, 110 Stat.
1452, 1457 (1996) (emphases added). “Managerial” acts include
such mistakes as “the temporary or permanent loss of records”
and, more generally, mistakes in the “exercise of judgment or
discretion relating to management of personnel.” Proced. &
Admin. Regs., sec. 301.6404-2(b)(1).
Petitioner’s problems began in April 1995, when the IRS
started to audit his 1992 tax return. The IRS later expanded the
audit to his 1993 and 1994 returns. The audit went slowly: in
January 1996, the IRS reassigned the first revenue agent working
on this case to other matters and didn’t put a second agent on it
until May 1996. A year later, the case went to the IRS’s Appeals
Office. The Appeals officer concluded that the audit needed
additional work and returned the case to the district office in
November 1997, where it went into suspended animation.
Respondent blames this on petitioner’s attorney, and petitioner
blames it on respondent’s personnel assignments and mishandling
of files. Work finally resumed in early 1999, and the parties
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