John B. Cosgriff - Page 5

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          filed a petition to this Court seeking review of respondent’s               
          failure to abate interest.                                                  
               This Court may order an abatement of interest only where               
          there is an abuse of discretion by the Commissioner in refusing             
          to abate interest.  See sec. 6404(i).  In order to show an abuse            
          of discretion, petitioner must establish that respondent                    
          exercised his discretion arbitrarily, capriciously, or without              
          sound basis in fact or law.  See Rule 142(a); Woodral v.                    
          Commissioner, 112 T.C. 19, 23 (1999).                                       
               Section 6404(e)(1) provides, in pertinent part, that the               
          Commissioner has discretionary authority to abate part or all of            
          an assessment of interest on:  (1) Any deficiency attributable to           
          any error or delay by the Commissioner’s officers or employees in           
          performing a ministerial act; or (2) any payment of tax to the              
          extent any error or delay in such payment is attributable to such           
          officers or employees being erroneous or dilatory in performing a           
          ministerial act.2  An error or delay by the Commissioner can be             
          taken into account only if it occurs after the Commissioner has             
          contacted the taxpayer in writing with respect to the deficiency            

               2In 1996, sec. 6404(e)(1) was amended by the Taxpayer Bill             
          of Rights 2, Pub. L. 104-168, sec. 301, 110 Stat. 1452, 1457                
          (1996), to allow the Commissioner to abate interest for an                  
          “unreasonable” error or delay resulting from “managerial” and               
          ministerial acts.  The amendment is in effect for tax years                 
          beginning after July 30, 1996, and thus is not applicable in this           
          case.  See Woodral v. Commissioner, 112 T.C. 19, 25 n.8 (1999).             

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