Court Opinion

ID: 4545211
Source: CourtListenerOpinion
Date Created: 2020-06-30 18:00:23.97026+00
Date Added: 2024-06-11T12:50:54.634372
License: Public Domain

Case: 19-60790      Document: 00515472053         Page: 1    Date Filed: 06/30/2020

           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT    United States Court of Appeals
                                                                                  Fifth Circuit

                                                                                 FILED
                                    No. 19-60790                              June 30, 2020
                                  Summary Calendar                            Lyle W. Cayce
                                                                                   Clerk

JON D. ADAMS,

               Petitioner - Appellant

v.

COMMISSIONER OF INTERNAL REVENUE,

               Respondent - Appellee

                            Appeal from a Decision of the
                              United States Tax Court
                              Tax Court No. 17289-18

Before STEWART, HIGGINSON, and COSTA, Circuit Judges.
PER CURIAM:*
       Respondent–Appellee the Commissioner of Internal Revenue issued
Petitioner–Appellant Jon D. Adams (Adams) a notice of deficiency for Adams’s
1999 tax return. Adams appealed this tax determination, and the tax court
entered a stipulated decision in agreement with both parties. However, this
stipulation did not otherwise affect the $207,043.74 in interest that had
accrued for his1999 tax return.

       * Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
     Case: 19-60790      Document: 00515472053        Page: 2     Date Filed: 06/30/2020

                                     No. 19-60790
      In turn, Adams subsequently made a request for abatement of interest.
The Commissioner denied such request, and Adams appealed to the tax court.
Upon motion, the court granted summary judgment in the Commissioner’s
favor, holding that the Commissioner had not abused his discretion in denying
taxpayer’s request for abatement. Adams appeals this decision. We affirm.
                                           I.
       This appeal primarily stems from Adams’s failure to account for the sale
of his Jackson, Mississippi cabaret establishment on his 1999 tax return. This
omission has cast a shadow on Adams ever since.                 He was convicted for
falsifying his 1999 and 2000 tax returns, 1 and subsequently, the Commissioner
levied this civil tax deficiency for the 1999 tax return that carried the interest
charge at issue. Several events that occurred during this civil proceeding are
worth noting. 2
      The civil examination into Adams’s tax liabilities for the 1999 and 2000
tax years began in January 2011. Adams and the Internal Revenue Service
(IRS) resolved the tax penalties for the 2000 tax return. As to the 1999 tax
return, the IRS issued a $111,151.00 tax deficiency that carried a civil fraud
penalty of $83,363.25, pursuant to Internal Revenue Code (IRC) § 6663.
Adams petitioned for redetermination on this tax deficiency, and in 2016, the
tax court entered a stipulated decision determining that Adams was liable for
an income tax deficiency of $91,762.34 and a civil fraud penalty of $68,821.73.
      Adams then filed a Form 843 (Claim for Refund and Request for
Abatement) to request abatement of the $207,043.74 in accrued interest for the

      1  The criminal proceedings are chronicled in United States v. Adams, 314 F. App’x
633, 635–37 (5th Cir. 2009) (per curiam). Of note, we vacated the conviction as to the 1999
count. Id. at 638–44.
       2 We also adopt the detailed factual and procedural background history in Adams v.
Comm’r, T.C. Memo. 2019-99, 2019 WL 3797612 (Aug. 12, 2019). The parties do not disagree
with the factual or the procedural background considered by the tax court.
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                                No. 19-60790
1999 tax year. Adams’s grounds for abatement were that (1) the interest
amount was excessive under IRC § 6404(a); and (2) the IRS unreasonably
delayed processing Adams’s deficiency case, pursuant to IRC § 6404(e)(1). The
Commissioner denied Adams’s request. According to the Commissioner, IRC
§ 6404(b) precluded Adams from premising an abatement on IRC § 6404(a),
and Adams failed to articulate a specific error or delay by the IRS in the
performance of a ministerial or managerial act. Adams filed a Formal Written
Protest of Denial of Interest Abatement. An appellate officer was assigned to
the case and issued a Final Determination in February 2018 that affirmed the
denial of Adams’s request for interest abatement. Adams appealed to the tax
court. The Commissioner subsequently moved for summary judgment, which
the tax court granted. Adams now appeals the tax court decision.
                                    II.
     After considering the parties’ arguments as briefed on appeal, and after
reviewing the record, the applicable law, and the tax court’s judgment and
reasoning, we affirm the tax court’s finding that the Commissioner did not
commit an abuse of discretion in denying Adams’s request for interest
abatement.
     “It follows that in reviewing a Tax Court decision, the duty of the court
of appeals is to consider whether the Tax Court committed error.” Comm’r v.
McCoy, 484 U.S. 3, 6 (1987) (per curiam).
     First, on appeal, Adams abandons his assertion that he is entitled to an
abatement of interest under IRC § 6404(a). The tax court dismissed this
argument because Adams is seeking abatement of his 1999 income tax year
and IRC § 6404(b) precludes abatement of interest on income tax. See Adams
v. Comm’r, T.C. Memo. 2019-99, 2019 WL 3797612, at *3–4 (Aug. 12, 2019).
We agree, and, because Adams no longer stands by this position on appeal, we

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                                 No. 19-60790
affirm. See Cinel v. Connick, 15 F.3d 1338, 1345 (5th Cir. 1994) (“A party who
inadequately briefs an issue is considered to have abandoned the claim.”).
      Under IRC § 6404(e)(1)(A), Adams may seek interest abatement, at the
Commissioner’s discretion, if Adams demonstrates that there is an
unreasonable error or delay on the part of the IRS in the performance of a
ministerial or managerial act.      “Ministerial act means a procedural or
mechanical act that does not involve the exercise of judgment or discretion ....”
26 C.F.R. § 301.6404-2(b)(2). According to the tax court, Adams only pointed
to examples of the IRS using its judgment and discretion to discern a tax
determination for his tax year, and “mere passage of time does not establish
error or delay in performing a ministerial or a managerial act.” Adams, 2019
WL 3797612, at *5. On appeal, Adams does not change his tone and continues
to maintain that his tax interest is subject to abatement because of the lapse
in time in which various IRS tax personnel were reviewing his deficiency case.
Again, the “decision on how to proceed in the litigation phase of the case
necessarily required the exercise of judgment and thus cannot be a ministerial
act.” Lee v. Comm’r, 113 T.C. 145, 150–51 (1999); see also Bartelma v. Comm’r,
T.C. Memo. 2005-64, 2005 WL 713798, at *3 (March 30, 2005) (stating that
“[d]eciding how and when to work on cases, based on an evaluation of the entire
caseload and workload priorities, is not a ministerial act”).       Because his
examples only identify decision-making instances on the part of the IRS that
involve the exercise of judgment or discretion, Adams fails to identify events of
unreasonable delay that fall within the definition of a “ministerial or
managerial act.” Cf. 26 C.F.R. § 301.6404-2(b). Adams therefore falls short in
providing grounds for interest abatement.
      For the foregoing reasons, we AFFIRM the summary judgment order in
favor of the Commissioner and otherwise adopt the tax court’s analysis in full.

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