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The Nicholses finally requested interest abatement on
October 31, 2003, in a letter sent to an IRS agent not involved
in the CDP process. In that letter, they asked for an abatement
of 75% of the accrued interest because of “numerous lengthy spans
of time during which the files just sat on the respective
personnel’s desks.” They also claimed that the initial audit
took six years to complete and that this was an unreasonable
amount of time. The letter didn’t offer any other reasons for
the interest abatement, nor did it explain why they decided to
ask for an abatement of only 75 percent of the interest charged.
The first IRS agent to consider the matter denied the request
quickly, but the Nicholses asked the IRS Appeals Office to review
that denial, arguing that the acts complained of were
“managerial” under section 301.6404-2 of the Procedure and
Administration Regulations. The Appeals Office has not yet held
a conference to consider their request.
Although the Nicholses had not listed either the NOL
carryback or the interest abatement issues as reasons to release
the lien, the Appeals officer who held the CDP hearing considered
the NOL carryback issue and noted in the record that the
Nicholses were pursuing interest abatement. In June 2004, that
officer tentatively agreed with the Nicholses to allow all the
NOLs. In a letter confirming their understanding of this
agreement, the Nicholses also asked him to abate all interest and
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Last modified: May 25, 2011