109 T.C. No. 3
UNITED STATES TAX COURT
ROBERT AND MARIE BANAT, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 2237-97. Filed August 5, 1997.
H submitted requests for abatement of interest to
the Internal Revenue Service prior to July 30, 1996,
the date of enactment of sec. 6404(g), I.R.C. After
July 30, 1996, R sent to H a notice of final
disallowance of abatement of interest pursuant to
sec. 6404(g). H and W filed a petition for review of
the failure to abate interest. R filed a motion to
dismiss for lack of jurisdiction as to H on the ground
that the request for abatement of interest was
submitted prior to the effective date of sec. 6404(g)
and as to W on the ground that no notice of final
disallowance of abatement of interest was mailed to
her.
Held: We have jurisdiction to review the denial
of H's request for abatement of interest, but we lack
jurisdiction as to W.
Robert and Marie Banat, pro se.
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Thomas J. Kerrigan, for respondent.
OPINION
COHEN, Chief Judge: This case is before us on respondent's
Motion to Dismiss for Lack of Jurisdiction. The issue is whether
the Court has jurisdiction pursuant to section 6404(g) to
consider petitioners' claims seeking abatement of interest.
Unless otherwise indicated, all section references are to the
Internal Revenue Code in effect at the time the petition was
filed, and all Rule references are to the Tax Court Rules of
Practice and Procedure. The resolution of this issue turns on
the effective date of section 6404(g).
Background
Petitioners are husband and wife who resided in Brooklyn,
New York, at the time the petition was filed.
On August 13, 1995, petitioner Robert Banat submitted
requests for abatement of interest to the Internal Revenue
Service (IRS) pursuant to section 6404(e) for the taxable years
1985 through 1987. The requests were submitted on Forms 843,
Claims for Refund and Request for Abatement, and were signed by
petitioner Robert Banat only. All requests were disallowed by
the IRS Associate Chief, New York City Appeals Office, by
issuance of a Notice of Disallowance (Notice) dated November 8,
1996. The Notice is addressed to petitioner Robert Banat only
and states as follows:
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This is your NOTICE OF DISALLOWANCE as required by law.
We are disallowing your claim for abatement of
interest, under Section 6404(e)(1) of the Internal
Revenue Code, for the reason(s) stated below:
We did not find any errors or delays relating to
the performance of a ministerial act.
If you disagree with our denial of your abatement of
interest claim, and you meet the eligibility
requirements described below, you may request review of
our denial in the Tax Court. Your request for Tax
Court review must be received by the Tax Court within
180 days of the date of this disallowance notice.
Petitioners filed their petition on February 5, 1997, which
date is 89 days after the mailing of the Notice of Disallowance.
On April 18, 1997, respondent filed a Motion to Dismiss for
Lack of Jurisdiction. Therein respondent seeks dismissal as to
petitioner Robert Banat on the ground that his requests for
abatement of interest were submitted prior to the effective date
of section 6404(g). With respect to petitioner Marie Banat,
respondent seeks dismissal on the ground that she has not filed
requests for abatement of interest for the taxable years in issue
and no notice of final determination was mailed to her.
Discussion
This case presents an issue of first impression concerning
the effective date of section 6404(g), added by section 302(a) of
the Taxpayer Bill of Rights 2 (TBOR 2), Pub. L. 104-168, 110
Stat. 1452, 1457 (1996). Section 6404(g) authorizes us to review
denials by the Commissioner of requests for abatement of interest
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under section 6404. Section 6404(g) provides, in pertinent part,
as follows:
(g) Review of Denial of Request for Abatement of
Interest.--
(1) In General.--The Tax Court shall have
jurisdiction over any action brought by a taxpayer
who meets the requirements referred to in section
7430(c)(4)(A)(ii) to determine whether the
Secretary's failure to abate interest under this
section was an abuse of discretion, and may order
an abatement, if such action is brought within 180
days after the date of the mailing of the
Secretary's final determination not to abate such
interest.
TBOR 2 section 302(b) provides that section 6404(g) applies “to
requests for abatement after the date of the enactment of this
Act." TBOR 2 was enacted on July 30, 1996.
Respondent's position in this case is that we lack
jurisdiction to review the denial of petitioner Robert Banat's
requests for abatement of interest because the requests were
submitted prior to July 31, 1996. Petitioners object on the
basis that they were issued a notice of final determination that
specifically authorizes the filing of a petition with this Court.
This Court is a court of limited jurisdiction and may
exercise jurisdiction only to the extent expressly provided by
statute. Breman v. Commissioner, 66 T.C. 61, 66 (1976). As
such, we must decide whether TBOR 2 section 302 confers
jurisdiction to review the denial of the requests for abatement
of interest in this case.
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As provided by TBOR 2 section 302, our jurisdiction applies
to requests for abatement of interest after July 30, 1996.
According to respondent, TBOR 2 section 302 precludes judicial
review of all requests for abatement of interest submitted to the
IRS prior to July 31, 1996. With respect to requests made and
denied prior to July 31, 1996, we agree. See White v.
Commissioner, 109 T.C. ___ (Aug. 5, 1997).
We decline, however, to interpret the effective date
provision to preclude jurisdiction with respect to requests for
abatement of interest pending with the IRS on July 31, 1996.
TBOR 2 is intended by the Congress "to provide for increased
protections of taxpayer rights in complying with the Internal
Revenue Code and in dealing with the Internal Revenue Service
(IRS) in its administration of the tax laws." H. Rept. 104-506,
at 22 (1996). It would be inconsistent with that intent to
interpret the effective date language in a manner that would deny
judicial review to taxpayers whose requests are continuing,
considered, and denied after the date of enactment. In our view,
the denial of a request that is pending with the IRS after July
30, 1996, may be the subject of review under section 6404(g).
In this case, petitioner Robert Banat's requests for
abatement of interest were pending on July 31, 1996, and denied
on November 8, 1996. Respondent issued a "Notice of
Disallowance" that constituted a final determination not to abate
interest pursuant to section 6404(e), and a timely petition was
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filed. Accordingly, we hold that we have jurisdiction to review
respondent's denial of petitioner Robert Banat's requests for
abatement of interest. Sec. 6404(g); Rule 280(b)(2).
With respect to petitioner Marie Banat, no request for
abatement of interest was ever made to the IRS and no notice of
final determination not to abate interest pursuant to section
6404(e) was issued. In a case seeking the review of the failure
to abate interest, jurisdiction in this Court depends, in part,
upon the issuance of a valid notice of final determination not to
abate interest. Sec. 6404(g)(1); Rule 280(b)(1). Because no
notice of final determination denying a request for abatement of
interest was issued to petitioner Marie Banat, we hold that we
lack jurisdiction insofar as this case pertains to her.
To reflect the foregoing,
An appropriate order
will be issued.