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II. Standard for Tax Court Review of Commissioner’s Refusal To
Abate Interest
Section 6404(e)5 authorizes the Commissioner to abate the
assessment of interest on any deficiency or payment of tax if
there is a delay in such payment attributable in whole or in part
to any error or delay by an officer or employee of the Internal
Revenue Service in performing a ministerial act. The statute
specifically provides that an “error or delay shall be taken into
account only if no significant aspect of such error or delay can
be attributed to the taxpayer involved”. Sec. 6404(e)(flush
language). In addition, an error or delay is taken into account
only “after the Internal Revenue Service has contacted the
taxpayer in writing with respect to such deficiency or payment.”
Id. Thus, abatement of interest for the period of time between
the date a taxpayer files a return and the date respondent
commences an audit is not permitted under section 6404(e). Sims
v. Commissioner, T.C. Memo. 1999-414 (citing H. Rept. 99-426, at
844 (1985), 1986-3 C.B. (Vol. 2) 1, 844).
5 Sec. 6404(e) was amended in 1996 by sec. 301 of the
Taxpayer Bill of Rights 2, Pub. L. 104-168, 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.” This amendment applies to interest accruing
with respect to deficiencies or payments for tax years beginning
after July 30, 1996. Woodral v. Commmissioner, 112 T.C. 19, 25
n.8 (1999). Accordingly, the amendment is not applicable to
petitioner’s 1992 and 1993 tax years.
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Last modified: May 25, 2011