TAX COURT OPINION

Case: Alec Jeffrey Megibow
Docket Number: 21928-08
Judge: Colvin
Opinion Type: bench
Filed: 03/29/2010
Pages: 7

'If I uA\ Gi UNITED STATES TAX COURT WASHINGTON , DC 2021 7 ALEC JEFFREY MEGIBOW, Petitione r v . ) Docket No . 21928-08 . COMMISSIONER OF INTERNAL REVENUE , Responden t O R D E R Pursuant to Rule 152(b), Tax Court Rules of Practice and Procedure, it i s ORDERED that the Clerk of the Court shall transmit herewith . to petitioner and to respondent a copy of the pages of the transcript of the hearing in the above case before Judge Joseph Robert Goeke at Louisville, Kentucky, on March 18, 2010, containing his oral findings of fact and opinion rendered at the conclusion of the hearing : In accordance with the oral findings of fact and opinion,, respondent's motion for summary judgment will be granted, and a decision will be entered for respondent . (Signed) Joseph Robert Goeke Judge Dated : Washington, D .C . March 29, 2010 SERVED MAR 3 0 2010 .41 3 1 BENCH OPINION BY JUDGE JOSEPH ROBERT GOEKE 2 MEGIBOW V . COMMISSIONER DOCKET NO . : 21928-0 8 3 MARCH 18, 201 0 4 The Court has decided to render ora l 5 findings of fact and opinion in this case, and the 6 following represents the Court's oral findings of fact 7 and opinion . The oral findings of fact and opinio n 8 shall not be relied upon as precedent in any other 9 case . 10 References to Section in this oral findings 11 of fact and opinion are to the Internal Revenue Code 12 in effect in 2005, and references to Rules are to the 13 Tax Court Rules of Practice and Procedure . 14 The Court will reference Title 28 at one 15 point in the oral findings of fact and opinion, but 16 that will be specifically cited . 17 This is a case brought under Sectio n 18 6404(e) . The Tax Court has jurisdiction under Section 19 6404(h) . Subsection (h)(1) provides that the taxpayer 20 bringing an action under this section must meet th e 21 requirements of Section 7430(c)(4)(A)(ii) . That 22 section cross-references Title 28, Sectio n 23 2412(d)(1)(b), and that provision limits taxpayer s 24 seeking relief to those with a net worth of less than 25 two million dollars. Heritage Reporting Corporation (202) 628-4888 4 1 Petitioner, pursuant to Rule 281(b)(5) , 2 alleged that he met that worth requirement in filing 3 this petition in this case . Respondent denies this 4 allegation for lack of information . However , 5 Respondent did not attempt discovery on challenging 6 Petitioner's allegation, and there is no othe r 7 evidence that would challenge Petitioner's assertio n 8 that he meets the net worth requirement . Therefore , 9 the Court finds that we have jurisdiction an this L a 10 case . 11 The immediate issue before the Court is 12 Respondent's motion for summary judgement . Th e 13 hearing was held on Respondent's motion on March 15, 14 2010 in Louisville, Kentucky . Petitioner objects to 15 Respondent's motion and has filed a statement under 16 Rule 50(c)in lieu of appearance at the hearing . 17 Respondent had also filed a motion to show cause why 18 proposed facts in evidence should not be accepted as 19 established . We entered an order to show cause o n 20 February 1, 2010, and discharged it in an order dated 21 February 25, 2010 based upon information submitted by 22 the Petitioner . 23 After the hearing on March 15, we find the 24 information Petitioner submitted to be insufficient to 25 merit the discharge, and we vacate our order o f Heritage Reporting Corporation (202) 628-4888 5 1 February 25th and find that the facts in evidenc e 2 submitted by Respondent with Respondent's motion to 3 show cause should be admitted in the record of this 4 case and accepted as established for purposes o f 5 addressing Respondent's motion for summary judgment . 6 In Respondent's motion, Respondent makes two 7 principal arguments to establish that there was n o 8 abuse of discretion in denying Petitioner's claim for 9 abatement . Respondent argues that some of . the delay 10 in question relating to the interest was attributable 11 to the Petitioner and that none of the interest was 12 accrued after Respondent had sent a written paper to 13 the Petitioner . 14 The facts of this case, for purposes o f 15 dealing with Respondent's motion, are not specifically 16 contested by Petitioner and are straightforward . 17 Petitioner filed a tax return for the 2005 tax year on 18 October 5, 2006 . This return was timely due to a n 19 extension, which was granted to the Petitioner to file 20 the return until October 15, 2006 . On the return , 21 $137,146 was reported as the tax due . However , 22 prepayments of tax were made only in the amount o f 23 $134,896 . Thus, there was a balance due on the return 24 of $2,250 . Petitioner paid the balance due on October 25 5, 2006 . Therefore, there was an interest assessed on Heritage Reporting Corporatio n (202) 628-4888 1 the $2,250 that accrued from the tax payment due dat e 2 of April 15, 2006 until October 6, 2006 . This r 3 interest was in the amount of $81 .26 . 4 Petitioner had also made payments for a 5 deficiency for the 1997 year . One of these payments 6 was posted on June 19, 2006 . It was determined by 7 Respondent that this payment led to an overpayment of 8 the 1997 year, and Petitioner's interest was credited 9 for the 2005 year as of June 19, 2006 in the amount o f 10 $79 .12 ; thus, reducing the determination of interest 11 from $81 .26 to $79 .12 . 12 Petitioner maintains that he should have 13 been credited the 1997 overpayment sooner . However, 14 the Court deems that issue to be irrelevant to the 15 determination of the application of the statutory 16 provision to Respondent's actions in this case . 17 Specifically Section 6404(e) provides as follows under 18 subsection (1) : "In the case of any assessment o f 19 interest on (a) any deficiency attributable in whole 20 or in part to any unreasonable error or delay by an 21 officer or employee of the Internal Revenue Service 22 (acting in his official capacity) in performin g 23 ministerial or managerial act ; or (b) any payment of 24 any tax described in Section 6212(a) to the exten t 25 that any unreasonable e,,2o 9 - or delay in such payment i s Heritage Reporting Corporation A (202) 628-4888 6 f Q (cid:127)1 7 1 attributable to such officer or employee bein g 2 erroneous or dilatory in performing a ministerial o r 3 managerial act, the secretary may abate the assessmen t 4 of all or any part of such interest for an y 5 For purposes of the preceding section, a n 6 error or delay shall be taken into account only if no 7 significant aspect of such error or delay can b e 8 attributed to the taxpayer involved and after th e 9 Internal Revenue Service has contacted the taxpayer in 10 writing with respect to such deficiency or payment ." 11 Respondent asserts that for the year 2005, 12 given the circumstances of this case and th e 13 Petitioner's request for an extension of time to file, 14 there was obviously no contact of the taxpayer i n 15 writing by the Respondent prior to June 19, 2006 . 16 That being the case, none of the interest that's in 17 dispute in this case was accrued after Respondent had 18 contacted Petitioner in writing . 19 Therefore, Respondent, based upon th e 20 undisputed facts, correctly argues that there can be 21 no abatement based upon the clear mandate of th e 22 statute, see Downing v . Commissioner 118 T .C . 22, 2002 23 and Guerrero v . Commissioner T .C . Memo 2006-2001 . 24 Petitioner makes allegations disputin g 25 Respondent's motion based upon his assertion that an Heritage Reporting Corporatio n (202) 628-4888 ki 8 1 additional overpayment should have been provided by 2 Respondent for the year 1997 . These allegations are 3 without merit, addressing the simple facts and legal 4 issue before the Court in this case, which is whether 5 Respondent abused discretion by denying the abatement . 6 We find that Respondent could not have abuse d 7 discretion because Respondent was simply no t 8 authorized to give an abatement under subsection 9 6404(e) by the clear terms of the statute and th e 10 simple facts of this case that Petitioner received no 11 written document from Respondent before the time that 12 the interest in question arose . 13 Therefore, a decision will be entered for 14 Respondent in this case, and we find that this case 15 meets the requirements of our Rule 121(a) such that a 16 decision may be entered based upon the pleadings and 17 the answer and the facts deemed established, which are 18 not specifically refuted by petitioner's allegations 19 and filings in the case . 20 This concludes the Court's oral findings of 21 fact and opinion in this case . 22 23 2 4 25 Heritage Reporting Corporation (202) 628-4888