- 9 -
Reg. 30162, 30163 (Aug. 13, 1987).8
This Court may order an abatement where the Commissioner’s
failure to abate interest was an abuse of discretion. See sec.
6404(i). In order to prevail, the taxpayer must demonstrate that
in not abating interest, the Commissioner exercised his
discretion arbitrarily, capriciously, or without sound basis in
fact or law. See Woodral v. Commissioner, 112 T.C. 19, 23
(1999).
In enacting section 6404(e), Congress intended for the
Commissioner to abate interest “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. Congress, however, did
not intend that abatement “be used routinely to avoid payment of
interest.” Id.
Petitioners argue that from January 1990 to December 16,
1994, respondent committed errors or delays while processing
their refund claim for 1985; i.e., committed errors or delays in
performing ministerial acts. Petitioners specifically complain
8 The final U.S. Treasury regulations under sec. 6404 were
issued on Dec. 18, 1998. See sec. 301.6404-2(b)(2), Proced. &
Admin. Regs., 63 Fed. Reg. 70012, 70013 (Dec. 18, 1998). The
final regulations contain the same definition of a ministerial
act as the temporary regulations. Because the final regulations,
however, incorporate amendments to sec. 6404 pursuant to the
Taxpayer Bill of Rights 2, Pub. L. 104-168, 110 Stat. 1452, 1457
(1996), they are inapplicable here. See id. at 70012.
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