- 18 - interest. See sec. 6404(i), formerly sec. 6404(g). In order to demonstrate an abuse of discretion, a taxpayer must prove that the Commissioner exercised his discretion arbitrarily, capriciously, or without sound basis in fact or law. See Rule 142(a); Lee v. Commissioner, 113 T.C. 145, 149 (1999); Woodral v. Commissioner, 112 T.C. 19, 23 (1999).13 The Commissioner has authority to abate, in whole or in part, an assessment of interest on a deficiency if the accrual of such interest is attributable to an error or delay by an officer or employee of the Internal Revenue Service, acting in his or her official capacity, in performing a ministerial act. See sec. 6404(e)(1).14 An error or delay by the Commissioner can be taken into account only (1) If it occurs after the Commissioner has contacted the taxpayer in writing with respect to the deficiency 13 Sec. 7491(a) serves to shift the burden of proof if, inter alia, the taxpayer introduces credible evidence with respect to any factual issue relevant to ascertaining the liability of the taxpayer for any tax imposed by subtitle A or B. In general, interest is treated as tax. See sec. 6601(e)(1). However, interest on an underpayment of tax is imposed by sec. 6601, which is part of subtitle F. Accordingly, sec. 7491(a) does not apply to the present case. 14 Sec. 6404(e) was amended in 1996 by the Taxpayer Bill of Rights 2, Pub. L. 104-168, sec. 301, 110 Stat. 1452, 1457 (1996), to permit the Commissioner to abate interest with respect to an “unreasonable” error or delay resulting from “managerial” or ministerial acts. The amendment applies to interest accruing with respect to deficiencies for taxable years beginning after July 30, 1996; accordingly, the amendment is inapplicable to the present case. See Woodral v. Commissioner, 112 T.C. 19, 25 n.8 (1999).Page: Previous 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Next
Last modified: May 25, 2011