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OPINION
We are asked to decide whether respondent abused his
discretion in denying petitioner’s interest abatement claim.
Interest on a deficiency in income tax generally begins to accrue
on the due date of the tax return and continues to accrue,
compounding daily, until payment is made. See secs. 6601(a),
6622(a).
This Court may order an abatement of interest if there is an
abuse of discretion by the Commissioner in failing to abate
interest. See sec. 6404(h) (formerly sec. 6404(g)); Lee v.
Commissioner, 113 T.C. 145, 149 (1999). In order to demonstrate
an abuse of discretion, a taxpayer must prove that the
Commissioner exercised his discretion arbitrarily, capriciously,
or without sound basis in fact or law. See Rule 142(a); Lee v.
Commissioner, supra; Woodral v. Commissioner, 112 T.C. 19, 23
(1999).
The Commissioner may abate interest if the taxpayer
identifies both an error or delay in payment of tax caused by a
ministerial or managerial act of respondent and the period of
time over which interest should be abated as a result of the
error or delay. See sec. 6404(e) (as currently in effect);
Donovan v. Commissioner, T.C. Memo. 2000-220; see also Krugman v.
Commissioner, 112 T.C. 230 (1999); Douponce v. Commissioner, T.C.
Memo. 1999-398.
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Last modified: May 25, 2011