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under section 104 cannot be attacked using section 6404(e)
because that decision was made before respondent contacted
petitioner in writing concerning the deficiency for the first
time, see sec. 6404(e), and involved the proper application of
Federal tax law, see sec. 301.6404-2T(b)(1), Temporary Proced. &
Admin. Regs., supra. Any delay occurring after petitioners
received the examination report and prior to the payment of the
tax deficiency was due to petitioners’ understandable desire to
consult with their tax adviser regarding an appropriate response
to the report.
Petitioners’ complaint is really one against fate-–they
filed their return just before the Supreme Court provided
definitive guidance on the correct tax treatment to be accorded
damages like those awarded here. Section 6404(e) simply does not
reach this type of complaint. Since there was no erroneous or
dilatory performance of a ministerial act, respondent lacked
authority to abate interest, and, therefore, his refusal to abate
interest in this case cannot be an abuse of discretion under
section 6404(e). Accordingly, we must sustain respondent’s
determination.
To reflect the foregoing,
Decision will be entered
for respondent.
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Last modified: May 25, 2011