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We have jurisdiction to determine whether the Commissioner’s
decision not to abate interest was an abuse of discretion. Sec.
6404(h)(1). In order to prevail, the taxpayers must prove that
the Commissioner abused his discretion by exercising this
discretion arbitrarily, capriciously, or without sound basis in
fact or law. Woodral v. Commissioner, 112 T.C. 19, 23 (1999).
Thus, the taxpayers bear the burden of proof. Rule 142(a).
Petitioners argue that the delay in their payment of their
1997 tax liability is attributable to the IRS’s unreasonable
error in sending the notice of delinquency to Mrs. Grandelli
under an incorrect name and to an incorrect address and the IRS’s
unreasonable delay in sending the notice of delinquency to
petitioners’ correct address. Petitioners argue that they
reasonably believed that their refund for 1996, as shown on their
amended 1996 return, would satisfy their 1997 tax liability. Had
they learned earlier that the IRS had not received either their
amended 1996 return or their original 1997 return, petitioners
might have been able to mail those returns again and receive
credit for their $1,160 overpayment in 1996 and avoid paying
several years’ worth of interest.
Respondent argues that he did not abuse his discretion, for
two reasons. First, respondent argues that the first time that
the IRS contacted petitioners in writing with respect to a
deficiency or payment was on March 9, 2002, when the IRS issued
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Last modified: March 27, 2008