T.C. Memo. 2009-39
UNITED STATES TAX COURT
LORENZO HILL, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 1047-08. Filed February 18, 2009.
Lorenzo Hill, pro se.
James H. Harris, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
COHEN, Judge: This action was commenced under section
6404(h) in response to a final determination by the Appeals
Office that petitioner is not entitled to abatement of interest
associated with his 1999 Federal income tax liability. The only
issue for decision is whether the Appeals officer abused his
discretion in rejecting petitioner’s claim for abatement of
- 2 -
interest. Unless otherwise indicated, all section references are
to the Internal Revenue Code in effect for the year in issue, and
all Rule references are to the Tax Court Rules of Practice and
Procedure.
FINDINGS OF FACT
Some of the facts have been stipulated, and the stipulated
facts are incorporated in our findings by this reference.
Petitioner resided in New Jersey at the time his petition was
filed.
Having no record of a return filed by petitioner for 1999,
on July 17, 2006, the Internal Revenue Service (IRS) sent to
petitioner a notice of deficiency for 1999. The notice
determined that petitioner had a tax liability of $14,012 and was
also liable for additions to tax. On October 30, 2006,
petitioner filed a petition with this Court seeking a
redetermination of the deficiency, but his case was dismissed for
lack of jurisdiction on January 22, 2007, because the petition
was untimely.
After the case was dismissed, on or about March 1, 2007,
petitioner completed a tax return for 1999 and submitted it to
the IRS. The return was accepted, and, on the basis of the
return, the IRS assessed an income tax liability of $2,140 and
additions to tax pursuant to section 6651(a)(1) and (2) on May
21, 2007. Also at that time, the IRS assessed interest of $1,641
- 3 -
on the deficiency and additions to tax. However, the IRS abated
the additions to tax and the related interest of $592.24.
On May 16, 2007, petitioner filed with the IRS a Form 843,
Claim for Refund and Request for Abatement, requesting abatement
of all interest assessed. The IRS denied petitioner’s request,
stating that no error or delay had occurred on the IRS’s part.
Petitioner appealed the denial to the Appeals Office. On
November 7, 2007, the Appeals Office sent to petitioner a Full
Disallowance--Final Determination letter denying petitioner’s
claim for abatement of the remaining interest. Petitioner paid
in full the deficiency of $2,140 and the associated interest of
$1,097.91 as of April 15, 2008.
OPINION
Petitioner argues that, where the IRS took over 6 years to
contact him about his deficiency, he should not be charged any
interest. Thus, he contends, the Appeals officer’s failure to
abate the interest was an abuse of discretion. Petitioner seeks
judicial review under section 6404(h)(1) and Rule 280(b).
Respondent argues that there were no unreasonable errors or
delays on the part of the IRS that would entitle petitioner to
abatement of interest under section 6404(e)(1). Respondent
further argues that, because petitioner is not entitled to
- 4 -
abatement of interest, there could not have been an abuse of
discretion in denying petitioner’s request.
The Court may order abatement if the Commissioner abused his
discretion by failing to abate interest in his final
determination. Sec. 6404(h)(1); see Hinck v. United States, 550
U.S. 501, 506 (2007) (holding that the Tax Court provides the
exclusive forum for judicial review of the IRS’s refusal to abate
interest). In order to prevail, a taxpayer must prove that the
Commissioner exercised his discretion arbitrarily, capriciously,
or without sound basis in fact or law. See Woodral v.
Commissioner, 112 T.C. 19, 23 (1999).
Section 6404(e)(1) provides in pertinent part:
(1) In general.--In the case of any assessment of
interest on--
(A) any deficiency attributable in whole or
in part to any unreasonable error or delay by an
officer or employee of the Internal Revenue
Service (acting in his official capacity) in
performing a ministerial or managerial act, or
(B) any payment of any tax described in
section 6212(a) to the extent that any
unreasonable error or delay in such payment is
attributable to such officer or employee being
erroneous or dilatory in performing a ministerial
or managerial act,
the Secretary may abate the assessment of all or any
part of such interest for any period. For purposes of
the preceding sentence, an error or delay shall be
taken into account only if no significant aspect of
such error or delay can be attributed to the taxpayer
involved, and after the Internal Revenue Service has
contacted the taxpayer in writing with respect to such
deficiency or payment. [Emphasis added.]
- 5 -
Section 6404(e) requires the taxpayer to identify a direct link
between the error or delay and the specific period during which
interest accrued. See Guerrero v. Commissioner, T.C. Memo. 2006-
201.
Petitioner argues that the passage of time, from the due
date of petitioner’s 1999 return on April 15, 2000, to when the
IRS sent the notice of deficiency on July 17, 2006, implies an
unreasonable error or delay because it exceeds the normal period
of limitations. There is no applicable limitation, however, when
a taxpayer fails to file a return. Sec. 6501(c)(3). In any
event, the time prior to July 17, 2006, is not counted under
section 6404(e), which exclusively pertains to the abatement of
interest after the IRS has contacted a taxpayer. See Krugman v.
Commissioner, 112 T.C. 230, 239 (1999). The only interest that
can be abated in this case would be the interest that accrued
after July 17, 2006 (when the IRS contacted petitioner), and
until the liability was paid in full on April 15, 2008. With
respect to this latter period, however, petitioner does not
identify any unreasonable error or delay caused by a ministerial
or managerial act by the IRS. Petitioner therefore fails to show
a direct link between the appropriate period of interest accrual
and any unreasonable error or delay caused by the IRS during that
period.
- 6 -
Taking into account all the facts and circumstances of this
case, we hold that the Appeals officer did not abuse his
discretion in denying petitioner’s request for abatement of
interest. In reaching our decision, we have considered all
arguments made, and, to the extent not mentioned, we conclude
that they are irrelevant, moot, or without merit.
To reflect the foregoing,
Decision will be entered for
respondent.