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interest for the specific periods for which petitioner seeks to
have the assessment of interest abated.
Petitioner makes no argument regarding the delay between
the completion of the underlying income tax examination and the
administrative appeal of the examination findings but maintains
that the examining agent’s mischaracterization of KSCI as a C
corporation was a ministerial act. Petitioner argues that the
mischaracterization was a ministerial act because: (1) The
examining agent treated KSCI as a C corporation without
engaging in any analysis and without making any judgments or
discretionary determinations; (2) the examining agent’s
disregard of KSCI’s status as an S corporation was arbitrary
and based solely on instructions from his supervisor and not
from any reasoned considerations of facts or law; and (3) the
examining agent’s approach was a procedural error that was
tantamount to placing KSCI’s tax returns in the C corporation
“stack” rather than in the S corporation “stack”.
Petitioner contends that respondent’s error directly
resulted in the imposition of interest on the Chans with
respect to the ultimately agreed tax deficiencies for 1992 and
1993. If not for this error, petitioner maintains, the
determination of the proper deficiencies would have been made
timely, and the Chans could have paid the deficiencies.
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