- 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).
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