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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).
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Last modified: May 25, 2011