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must show that the Commissioner exercised his discretion
arbitrarily, capriciously, or without sound basis in fact or law.
Woodral v. Commissioner, supra at 23.
As applicable for the year in issue, section 6404(e) permits
the Commissioner to abate interest with respect to any
“unreasonable” error or delay resulting from a ministerial or
managerial act.3 The regulations define a ministerial act as a
“procedural or mechanical act that does not involve the exercise
of judgment or discretion, and that occurs during the processing
of a taxpayer’s case after all prerequisites to the act, such as
conferences and review by supervisors, have taken place.” Sec.
301.6404-2(b)(2), Proced. & Admin. Regs. The regulations define
a managerial act as “an administrative act that occurs during the
processing of a taxpayer’s case involving the temporary or
permanent loss of records or the exercise of judgment or
discretion relating to management of personnel.” Sec. 301.6404-
2(b)(1), Proced. & Admin. Regs.
Petitioners appear to assert that there was delay in
processing the OIC. In particular, petitioners assert that delay
resulted when the OIC was returned to them by the IRS for reasons
3 Sec. 6404(h), formerly sec. 6404(g), is applicable to
requests for abatement after July 30, 1996. Taxpayer Bill of
Rights 2 (TBOR 2), Pub. L. 104-168, sec. 302, 110 Stat. 1457
(1996). Further, sec. 301(a)(1) and (2) of TBOR 2 permits
abatement of interest with respect to unreasonable error or delay
from “managerial” acts, effective for interest accruing with
respect to tax years beginning after July 30, 1996.
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