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a procedural or mechanical act that does not involve
the exercise of judgment or discretion, and that occurs
during the processing of a taxpayer’s case after all
prerequisites to the act, such as conferences and
review by supervisors, have taken place. A decision
concerning the proper application of federal tax law
(or other federal or state law) is not a ministerial
act. [Sec. 301.6404-2T(b)(1), Temporary Proced. &
Admin. Regs., 52 Fed. Reg. 30162 (Aug. 13, 1987).]
The only actions on which petitioners’ claim could be based are
the decision to audit and the decision to disallow the exclusion
relying upon the Supreme Court’s decision in Commissioner v.
Schleier, 515 U.S. 323 (1995). Respondent’s decision to audit
and the timing thereof cannot be attacked using section 6404(e)
because section 6404(e) “applies only after respondent has
contacted the taxpayer in writing about the deficiency or payment
of tax.” Krugman v. Commissioner, supra at 239. Consequently,
section 6404(e) “‘does not * * * permit the abatement of interest
for the period of time between the date the taxpayer files a
return and the date the IRS commences an audit, regardless of the
length of that time period.’” Id. (quoting H. Rept. 99-426,
supra, 1986-3 C.B. (Vol. 2) at 844). Likewise, respondent’s
decision to apply Schleier to disallow petitioners’ exclusion
5Sec. 301.6404-2T(b)(1), Temporary Proced. & Admin. Regs.,
52 Fed. Reg. 30162 (Aug. 13, 1987), was promulgated before sec.
6404(e) was amended in 1996 and was in effect during 1993. The
final regulation contains the same definition of ministerial act
and applies to tax years beginning after July 30, 1996. See sec.
301.6404-2T, Proced. & Admin. Regs., Fed. Reg. 30162 (Aug. 13,
1987).
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