- 6 -
all prerequisites to the act, such as conferences and review by
supervisors, have taken place. See sec. 301.6404-2T(b)(1),
Temporary Proced. & Admin. Regs., 52 Fed. Reg. 30163 (Aug. 13,
1987).6
In enacting section 6404(e), Congress did not intend that
the abatement of interest provision “be used routinely to avoid
payment of interest” but be used in instances “where failure to
abate interest would be widely perceived as grossly unfair.” H.
Rept. 99-426, at 844 (1985), 1986-3 C.B. (Vol. 2) 1, 844; S.
Rept. 99-313, at 208 (1986), 1986-3 C.B. (Vol. 3) 1, 208.
The Commissioner's power to abate an assessment of interest
involves the exercise of discretion. See Lee v. Commissioner,
113 T.C. 145 (1999). Although we give the Commissioner's
decision some deference, we have the authority to determine
whether the Commissioner's failure to abate interest was an abuse
of discretion. See sec. 6404(g); Lee v. Commissioner, supra.
The Court will direct the Commissioner to abate interest only if
the Commissioner exercised his discretion arbitrarily,
capriciously, or without sound basis in fact or law. See Woodral
v. Commissioner, supra. Our review is limited to whether there
6 The final Treasury regulation under sec. 6404 was issued
on Dec. 18, 1998. The final regulation contains the same
definition of ministerial act as the temporary regulation. The
final regulation generally applies to interest accruing on
deficiencies or payments of tax described in sec. 6212(a) for tax
years beginning after July 30, 1996. See sec. 301.6404-2(b)(2),
Proced. & Admin. Regs.
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