T.C. Memo. 2003-106

UNITED STATES TAX COURT

ROBERT L. STEWART, Petitioner v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 12947-00. Filed April 17, 2003.

Robert L. Stewart, pro se.

Catherine L. Campbell, for respondent.

MEMORANDUM FINDINGS OF FACT AND OPINION

LARO, Judge: On June 22, 2000, respondent issued to

petitioner a notice of final determination with respect to

petitioner’s claim to abate interest on his 1990 income tax

deficiency under section 6404(e). In the notice, respondent

partially abated part of the interest and denied the balance of

petitioner’s claim. Petitioner timely filed a petition under
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1 Sec. 6404(g) was redesignated sec. 6404(i) by the Internal

Revenue Service Restructuring and Reform Act of 1998, Pub. L.

105-206, secs. 3305(a), 3309(a), 112 Stat. 743. Sec. 6404(i) was

later redesignated sec. 6404(h) by the Victims of Terrorism

Relief Act of 2001, Pub. L. 107-134, sec. 112(d)(1)(B), 115 Stat.

2435.

2 In his petition petitioner disputes $4,656.86. This

amount, however, consists of interest of $3,706.36 and of the

addition to tax of $950.50 under sec. 6651(a). On April 18,

2002, respondent moved the Court to dismiss for lack of

jurisdiction and to strike petitioner’s claim for abatement of

additions to tax. The Court granted respondent’s motion. See

Stewart v. Commissioner, T.C. Memo. 2002-139. Accordingly, we

limit our discussion to the interest abatement claim.

section 6404(g)1 and Rule 280. We decide whether respondent

abused his discretion in failing to abate accrued interest in

whole. We hold he did not. Section references are to the

applicable versions of the Internal Revenue Code. Rule

references are to the Tax Court Rules of Practice and Procedure.

FINDINGS OF FACT

Some of the facts have been stipulated and are so found. 

The stipulated facts and the exhibits submitted therewith are

incorporated herein by this reference. Petitioner resided in

Sunnyside, Washington, when he petitioned the Court.2

On October 17, 1991, petitioner filed his 1990 Federal

income tax return. The tax return did not include in

petitioner’s gross income a brokerage fee and showed income tax

due of $10,325. Petitioner’s tax return was not accompanied by

any payment.
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On November 18, 1991, respondent assessed petitioner’s tax

liability for 1990 as shown on petitioner’s tax return. In

addition, respondent assessed an addition to tax of $413 under

section 6651(a) for failure to pay timely the tax due.

On April 19, 1993, respondent assessed additional income tax

due from petitioner of $3,802 due to the inclusion of the

brokerage fee. Petitioner did not dispute that determination by

respondent.

On October 28, 1993, petitioner filed a petition for Chapter

13 bankruptcy relief, which was subsequently converted to a

Chapter 7 case. Petitioner received a discharge on August 15,

1994, but for his 1990 income tax liability.

On August 14, 1995, respondent erroneously abated

petitioner’s income tax liability of $10,325. Respondent also

erroneously abated on the same date the addition to tax and

interest for 1990. (As discussed below, respondent reassessed the

amount of the addition to tax and interest on October 25, 1999.

Starting from January 15, 1996, respondent sent to

petitioner 39 monthly statements which did not reflect any

interest accrued against petitioner. The first monthly statement

showed petitioner’s 1990 income tax deficiency as $3,802. 

Respondent concedes that those monthly statements were misleading

because they did not include any accrued interest.
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3 The record does not contain a copy of the installment

agreement, nor does it disclose all of its relevant terms.

On January 26, 1996, petitioner made a first payment of $29

toward his 1990 income tax liability.

In March 1996, petitioner entered into an installment

agreement to pay his 1990 income tax liability.3 The terms of

this agreement required that petitioner make 39 payments of $72

toward his 1990 tax liability. From March 29, 1996, to June 25,

1999, petitioner made 39 payments of $72. In total, petitioner

paid $3,823 toward his 1990 income tax liability.

On July 14, 1999, respondent sent to petitioner a monthly

statement showing that the current balance on his 1990 income tax

liability was $845. A note to that statement provided: “Penalty

and interest totals are cumulative, but are not calculated to the

Due Date shown above. If a payoff total is required, please call

the telephone number shown below.” Petitioner called the

telephone number shown on that statement. Later, petitioner

contacted Insolvency Technician Molly Modin. Based on those

conversations, on July 20, 1999, petitioner sent to the Internal

Revenue Service a check for $845 which he believed to be the

remaining outstanding balance of his 1990 tax liability. On July

23, 1999, this amount was applied to petitioner’s 1990 income tax

liability.
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On October 25, 1999, respondent assessed against petitioner

an addition to tax of $828.30 under section 6651(a). The same

day respondent sent to petitioner a notice stating that

respondent had changed his 1990 account to “correct

[petitioner’s] penalty charge and interest charges.” That

statement showed the addition to tax of $828.30 and interest due

of $3,414.37. Petitioner immediately sent a fax to Revenue

Officer Curtis Rowe. Attached to that fax were copies of monthly

statements that petitioner previously received from respondent. 

Those statements were dated March 19, 1997, June 16, 1999, July

14, 1999, and August 18, 1999, respectively. In addition,

petitioner attached a copy of his statement of account dated

August 9, 1999. The monthly statements and petitioner’s

statement of account, which petitioner sent to the Revenue

officer, did not show any interest or penalties/additions to tax

owed by petitioner.

Respondent treated petitioner’s October 25, 1999, fax as an

informal request for interest abatement. On November 8, 1999,

respondent denied petitioner’s interest abatement request.

On November 17, 1999, petitioner appealed respondent’s

determination not to abate all of the interest and additions to

tax assessed against him with respect to his 1990 income tax

liability.
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4 Sec. 6404(e) was amended by Congress in 1996 to permit

abatement of interest for “unreasonable” error and delay in

performing a “ministerial or managerial” act. Taxpayer Bill of

Rights 2, Pub. L. 104-168, sec. 301(a), 110 Stat. 1457 (1996). 

The amendment applies to taxable years beginning after July 30,

1996, and therefore does not apply to this case.

On June 15, 2000, petitioner submitted to respondent a Form

843, Claim for Refund and Request for Abatement, requesting an

abatement of all interest and additions to tax assessed against

him for 1990. The Appeals Officer Vicki Olsen reviewed

petitioner’s claim and determined that petitioner is entitled to

abatement of interest by $1,707. The abatement was relating to

the interest accrued from January 15, 1996, to October 25, 1999.

OPINION

A. Burden of Proof

Petitioner bears the burden of proving that respondent

abused his discretion by not having abated interest against

petitioner. Rule 142(a); Lee v. Commissioner, 113 T.C. 145, 149

(1999); Woodral v. Commissioner, 112 T.C. 19, 23 (1999). As will

be shown in the discussion below, petitioner failed to establish

that respondent abused his discretion by denying petitioner’s

interest abatement claim. Therefore, petitioner failed to meet

his burden of proof.

B. Interest Abatement

As in effect for the taxable year in issue, section

6404(e)(1)4 provides that the Secretary may abate all or any part
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of an assessment of interest on any deficiency or payment of tax

if either: (A) The deficiency is attributable, in whole or in

part, "to any error or delay by an officer or employee of the

Internal Revenue Service (acting in his official capacity) in

performing a ministerial act," or (B) any error or delay in

payment of tax is attributable to such officer or employee being

erroneous or dilatory in performing a ministerial act.

For purposes of section 6404(e)(1), a "ministerial act" is 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. Lee v.

Commissioner, supra at 150; sec. 301.6404-2T(b)(1), Temporary

Proced. & Admin. Regs., 52 Fed. Reg. 30163 (Aug. 13, 1987).

This Court has jurisdiction to order an abatement of

interest only when the Commissioner has abused his discretion in

refusing a taxpayer's request to abate interest. Sec. 6404(g).

In order for a taxpayer to show an abuse of discretion, he or she

must establish that the Commissioner exercised his discretion

arbitrarily, capriciously, or without sound basis in fact or law.

See Rule 142(a); Lee v. Commissioner, supra at 149; Woodral v.

Commissioner, supra at 23.

Subject to other requirements not applicable in this case,

under section 6404(e) a taxpayer is entitled to an abatement of
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assessed interest on a deficiency only for any period “after the

Internal Revenue Service has contacted the taxpayer in writing

with respect to such deficiency”. Sec. 6404(e)(1). Respondent

contacted petitioner in writing with respect to petitioner’s 1990

income tax deficiency on January 15, 1996, when he sent to

petitioner the first erroneous monthly statement. Respondent

then corrected his mistake on October 25, 1999.

Respondent’s denial of petitioner’s claim to abate interest

is supported by the overly broad scope of petitioner’s claims. 

See Donovan v. Commissioner, T.C. Memo. 2000-220. Petitioner

argues that he is entitled to the abatement of interest that

accrued on his 1990 tax deficiency before January 15, 1996, and

after October 25, 1999, because: (1) Respondent erred in

computing his 1990 tax liability when he entered into an

installment agreement in 1996; (2) his installment payments

should have been larger or the period of his installment

agreement should have been longer; (3) respondent erroneously

released a tax lien against his property; (4) respondent gave him

an incorrect payoff balance and statement of account; and (5) a

payment made on his 1992 tax liability should have been applied
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5 In reaching a decision under the abuse of discretion

standard, the Court focuses on arguments and information

available to respondent at the time his discretion was exercised. 

Sego v. Commissioner, 114 T.C. 604, 612 (2000); Donovan v

Commissioner, T.C. Memo. 2000-220. Because petitioner did not

present his fifth argument in the interest abatement claim, we do

not address that argument.

6 In this regard, we understand petitioner also to be

asserting that he is liable for none of the interest because it

relates to an addition to tax that respondent assessed after the

applicable period of limitations under sec. 6501. As we have

found, the addition to tax was assessed initially on Nov. 18,

1991 (approximately 1 month after petitioner filed his related

return), abated on Aug. 14, 1995, and then reassessed on Oct. 25,

1999. Petitioner’s assertion, which focuses on the applicability

of the addition to tax, is not an appropriate consideration in

this interest abatement proceeding.

against his 1990 tax liability.5 We disagree with petitioner

that he is entitled to his requested interest abatement.

Section 6404(e) requires not only the identification of an

error or delay caused by a ministerial act on the Commissioner’s

part, but the identification of a specific period of time over

which interest should be abated as a result of the error or

delay. See, e.g., Krugman v. Commissioner, 112 T.C. 230 (1999);

Douponce v. Commissioner, T.C. Memo. 1999-398. In his interest

abatement claim, petitioner failed to show a correlation between

the errors he alleged and any specific period of time. Instead,

he requested the abatement of “any and all” interest accrued on

his 1990 income tax deficiency.6

Respondent has the authority to abate interest accrued as a

result of a ministerial error or delay by his employees only if
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no significant aspect of such error or delay can be attributed to

the taxpayer involved. Hawksley v. Commissioner, T.C. Memo.

2000-354; Donovan v. Commissioner, supra; sec. 6404(e)(1); sec.

301.6404-2T(a)(2), Temporary Proced. & Admin. Regs., 52 Fed. Reg.

30163 (Aug. 13, 1987). Respondent does not have authority to

abate interest where, as here, the taxpayer contributed

significantly to the accrual of that interest. The interest

accrued on petitioner’s 1990 income tax deficiency prior to

January 15, 1996, and after October 25, 1999, was the result of

petitioner’s own actions and/or inactions. Petitioner failed to

file timely his 1990 income tax return. Not a single payment was

made by petitioner toward his 1990 income tax liability until

January 26, 1996. Petitioner further failed to make any payments

toward his 1990 income tax liability since October 25, 1999, when

he was given a notice of the outstanding balance. Petitioner is

responsible for the interest.

Petitioner further failed to identify a single ministerial

error or delay by respondent that resulted in the accrual of

interest on his 1990 income tax deficiency before January 15,

1996, and after October 25, 1999. Consequently, respondent had

no authority to abate any part of the interest petitioner seeks

to have abated. By refusing to do what he had no authority to

do, respondent did not abuse his discretion. Woodral v.

Commissioner, 112 T.C. at 25.
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On the basis of our analysis, we hold that respondent’s

denial of petitioner’s claim for abatement of interest was not an

abuse of discretion.

To reflect the foregoing,

Decision will be entered

for respondent.