H&H Trim & Upholstery Co., Inc. - Page 5

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               In general, interest on a Federal tax liability begins to              
          accrue from the last date prescribed for payment of such tax and            
          continues to accrue, compounding daily, until payment is made.              
          See secs. 6601(a), 6622.  Although the accrual of interest occurs           
          continually, it is assessed only periodically.  Section 6404(a)             
          provides that the Commissioner is authorized to abate the unpaid            
          portion of the assessment of any tax or any liability in respect            
          thereof that is (1) excessive in amount, (2) assessed after the             
          expiration of the period of limitations properly applicable                 
          thereto, or (3) erroneously or illegally assessed.  The reference           
          to “any tax” in section 6404(a) includes employment taxes,                  
          Woodral v. Commissioner, 112 T.C. 19 (1999), and the reference to           
          “any liability in respect” to the tax includes interest that has            
          accrued on the underlying tax.3  The Commissioner’s failure to              
          abate interest as provided in section 6404(a) is subject to                 
          review for abuse of discretion by this Court.  Sec. 6404(h)(1);             
          Woodral v. Commissioner, supra at 22-23.                                    
               We are satisfied that the interest that petitioner seeks to            
          have abated was not assessed (or will not be assessed)                      
          erroneously, illegally, or after the period of limitations                  

               3  As best as can be determined from the record, as of the             
          date of trial, substantially all, if not all, of petitioner’s               
          then-outstanding unpaid employment tax liability for the fourth             
          quarter of 1993 was attributable to interest.                               

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