Hugh D. and Nancy L. Sims - Page 5




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          Form 4549-CG and the check.  Respondent applied the payment to              
          petitioners’ 1993 account, allocating $8,031 to the income tax              
          deficiency and $2,301 to accrued interest.                                  
               On March 5, 1997, petitioners filed a claim for refund and             
          request for abatement of interest assessed and paid with respect            
          to their 1993 income tax deficiency.  In their claim, petitioners           
          explained that, when their 1993 return was prepared and filed,              
          existing legal precedent supported the position taken on their              
          return.  Petitioners argued that it was only after the Supreme              
          Court decided Schleier on June 14, 1995, that the precedent on              
          which they reasonably relied was overruled.  Since, in their                
          view, they complied with the law as it existed when their 1993              
          return was filed, petitioners asserted that the income tax                  
          deficiency was not their fault, and they should not have to pay             
          interest on the deficiency for the period prior to June 14, 1995,           
          when Schleier was decided.                                                  
               Respondent disallowed petitioners’ claim in a Notice of                
          Final Determination dated March 19, 1999, and this proceeding               
          followed.                                                                   
                                     Discussion                                       
               Section 6404(e), as in effect for 1993, authorizes                     
          respondent to abate all or any part of an assessment of interest            
          on (1) any deficiency attributable in whole or in part to any               
          error or delay by an employee of the Internal Revenue Service,              






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