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that agent’s cases, all of which are purposeful activities by the
Commissioner. See, e.g., sec. 301.6404-2T(b)(2), Examples (3),
(4), and (5), Temporary Proced. & Admin. Regs., supra.
Respondent has identified no purpose served by losing a
taxpayer’s returns, and we know of none.
In 1996, Congress amended section 6404(e) to provide for
abatement of interest that accrues as a result of an unreasonable
error or delay in performing a ministerial or managerial act.
Sec. 6404(e)(1)(A) and (B); Taxpayer Bill of Rights 2, Pub. L.
104-168, sec. 301(a), 110 Stat. 1457 (1996). Respondent points
out that a regulation promulgated after enactment of that 1996
amendment, section 301.6404-2(b)(1), Proced. & Admin. Regs.,
provides: “Managerial act means an administrative act that
occurs during the processing of a taxpayer’s case involving the
temporary or permanent loss of records”. Respondent also points
out that section 301.6404-2(c), Example (6), Proced. & Admin.
Regs. (Example (6)), provides as follows:
Example 6. A revenue agent has completed an
examination of the income tax return of a taxpayer.
There are issues that are not agreed upon between the
taxpayer and the IRS. Before the notice of deficiency
is prepared and reviewed, a clerical employee misplaces
the taxpayer’s case file. The act of misplacing the
case file is a managerial act. The Commissioner may
(in the Commissioner’s discretion) abate interest
attributable to any unreasonable delay resulting from
the file being misplaced.
Respondent contends that Example (6) supports a holding here
that the loss of a taxpayer’s records is a managerial act. We
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