- 3 - request. Petitioner owed $813.40 in accrued interest and an $8.21 penalty for failure to pay the interest when demanded, and respondent offset $821.61 of petitioner’s 2000 tax refund to satisfy this liability. Discussion If the Commissioner abuses his discretion in failing to abate interest under section 6404, this Court may order an abatement. Sec. 6404(h)(1). In order to prevail, a taxpayer must prove that the Commissioner exercised this discretion arbitrarily, capriciously, or without sound basis in fact or law. Woodral v. Commissioner, 112 T.C. 19, 23 (1999). On brief, petitioner states that respondent did not notify him of the section 72(t) additional tax until 2-1/2 years after his 1995 Federal income tax return was filed. Accordingly, petitioner appears to rely upon section 6404(e)(1) and (g)(1). Under preamendment section 6404(e),2 the Commissioner “may abate the assessment of interest on any payment of tax to the extent that any error or delay in payment is attributable to an 2 In 1996, sec. 6404(e) was amended under sec. 301 of the Taxpayer Bill of Rights 2, Pub. L. 104-168, 110 Stat. 1457 (1996), to permit the Secretary to abate interest with respect to an “unreasonable” error or delay resulting from “managerial” and ministerial acts. This amendment, however, applies to interest accruing with respect to deficiencies or payments for tax years beginning after July 30, 1996; therefore, the amendment is inapplicable to the case at bar. See Woodral v. Commissioner, 112 T.C. 19, 25 n.8 (1999).Page: Previous 1 2 3 4 Next
Last modified: May 25, 2011