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Section 6404(e) was enacted under the Tax Reform Act of 1986,
Pub. L. 99-514, sec. 1563(a), 100 Stat. 2085, 2762, and applies
to interest accruing with respect to deficiencies or payments for
tax years beginning after December 31, 1978. See Tax Reform Act
of 1986, Pub. L. 99-514, sec. 1563(b), 100 Stat. 2085, 2762.
Petitioners object to respondent's Motion for Partial
Summary Judgment on the ground that the assessment for interest
for the taxable year 1978 is attributable to the disallowance of
net operating losses arising in 1980 and 1981 that petitioners
carried back to the taxable year 1978.
Based upon our review of section 6404(e), we hold that
respondent lacks the authority to grant a request for abatement
of interest for the taxable year 1978. Although the deficiency
that respondent assessed against petitioners for the taxable year
1978 is attributable to the disallowance of net operating losses
for later years, it nevertheless is clear that the interest in
question, which is computed from the due date of petitioners' tax
return for 1978, is attributable to tax due for the 1978 taxable
year. See Bankamerica v. Commissioner, 109 T.C. 1 (1997); Fluor
assessment is attributable in whole or in part to a mathematical
error if the return was prepared by an officer or employee of the
Internal Revenue Service acting in his official capacity to
provide assistance to taxpayers in the preparation of income tax
returns, and sec. 6404(e)(2) applies with respect to the
assessment of interest on an erroneous refund of $50,000 or less
where the taxpayer has not caused the erroneous refund.
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Last modified: May 25, 2011