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Section 6404(e)(2) provides:
The Secretary shall abate the assessment of all interest on
any erroneous refund under section 6602 until the date
demand for repayment is made, unless–-(A) the taxpayer (or a
related party) has in any way caused such erroneous refund,
or (B) such erroneous refund exceeds $50,000.
Without passing upon the question of whether the refund in
this case constitutes an erroneous refund that was caused by
petitioner's failure to include a computation of the AMT, this
Court has no jurisdiction over an abatement of interest issue
arising under section 6404(e). As the Court noted in 508 Clinton
St. Corp. v. Commissioner, 89 T.C. 352, 355 (1987): "Section
6404(e), by its very terms, does not operate until after there
has been an assessment of interest, which has not yet occurred in
this case." In this case, neither the deficiency nor the
interest on the deficiency has been assessed, nor can any
assessment be made until the decision in this case is entered.
Petitioner may file with respondent an administrative request for
abatement of any interest assessed. If, in a notice of final
determination, petitioner's request is denied, petitioner may
then petition this Court for a review of that determination.
However, this Court will order an abatement only if it is shown
that the Commissioner abused his discretion in denying the
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Last modified: May 25, 2011