                         T.C. Memo. 2003-220



                       UNITED STATES TAX COURT



     GEORGE N. AHMAOGAK AND MAGGIE AHMAOGAK, Petitioners v.
           COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 10849-01.              Filed July 23, 2003.



     Mason D. Morisset, for petitioners.

     Lisa M. Oshiro, for respondent.


                         MEMORANDUM OPINION


     DAWSON, Judge:    This case was assigned to Special Trial

Judge Lewis R. Carluzzo pursuant to section 7443A(b)(5) and Rules

180, 181 and 183.1    The Court agrees with and adopts the opinion

of the Special Trial Judge, which is set forth below.


     1
        Unless otherwise indicated, section references are to the
Internal Revenue Code of 1986, as amended. Rule references are
to the Tax Court Rules of Practice and Procedure.
                                 - 2 -

               OPINION OF THE SPECIAL TRIAL JUDGE

     CARLUZZO, Special Trial Judge:      On February 28, 2001,

respondent issued a notice of final determination denying in part

petitioners’ request to abate interest on their 1989 Federal

income tax liability.   In response to that notice, petitioners

timely petitioned this Court for a review of respondent’s denial.

Our jurisdiction is established by section 6404(h).2     The issue

for decision is whether respondent’s failure to abate interest on

petitioners’ 1989 Federal income tax liability is an abuse of

discretion.

                            Background

     Petitioners resided in Barrow, Alaska, at the time the

petition was filed.   The facts in this case, all of which have

been stipulated, are easily summarized.

     Petitioners are husband and wife.     They filed a timely joint

1989 Federal income tax return.3    Computational errors were made

on the return, and as a result the total tax liability reported

on the return was understated.     A notice was sent to petitioners




     2
        Sec. 6404(h) was previously designated sec. 6404(i). See
Victims of Terrorism Tax Relief Act of 2001, Pub. L. 107-134,
sec. 112(d)(1)(B), 115 Stat. 2435.
     3
        The return has not been included in the record. Details
of the return are set forth in a document prepared by
respondent’s Appeals officer in response to petitioners’
administrative claim for interest abatement. The parties
stipulated the truth of the factual portions of this document.
                                - 3 -

explaining the error and advising them they owed an additional

$1,387.25, including interest of $35.08.

     On May 29, 1991, respondent first notified petitioners that

their 1989 return had been selected for examination.    At the

time, petitioners resided in Barrow, Alaska, and the revenue

agent assigned to the examination was located in Fairbanks,

Alaska.   We cannot determine whether petitioners or anyone acting

on their behalf met with the revenue agent during the

examination.   Because of the distance between petitioners’

residence and the revenue agent’s post of duty, there might have

been some logistical complications in scheduling meetings, and

there appear to have been some delays in the receipt of

correspondence mailed between petitioners and the revenue agent.

     The revenue agent’s report was mailed to petitioners on

December 16, 1991.4   Having received no protest to the revenue

agent’s report by March 18, 1992, respondent began the process of

preparing a notice of deficiency that was mailed to petitioners

on March 23, 1992.    In that notice of deficiency respondent

determined a deficiency of $7,475 in petitioners’ 1989 Federal




     4
        This date is erroneously listed as “December 16, 1992” in
the chronology of events prepared by the Appeals officer.
Although an obvious error, petitioners make repeated references
to the event as though it actually occurred in 1992.
                               - 4 -

income tax and imposed a section 6662(a) penalty of $1,495.5

The deficiency apparently results from, or is largely

attributable to, the disallowance of a claimed charitable

contribution deduction for the donation of whale meat to certain

native Alaskan tribal communities and the disallowance of

deductions for expenses incurred in connection with whaling

activity.

     On August 17, 1992, the deficiency and penalty were

assessed, as was interest of $2,348.31.

     On February 1, 1993, an untimely petition was filed with

this Court (docket No. 2198-93) in response to the above-

referenced notice of deficiency.   Because the petition was not

filed within the period prescribed by section 6213(a), upon

respondent’s motion that case was dismissed for lack of

jurisdiction on that ground on April 13, 1993.

     Including tax, additions to tax, penalties, and interest, as

of March 26, 1993, all but $8.61 of petitioners’ 1989 liability

had been paid.   Because this amount is what respondent refers to

as “below tolerance”, respondent did not issue a notice and

demand for the $8.61.




     5
        A copy of the notice of deficiency has not been included
in the record, but it appears that in that notice respondent also
determined a deficiency in petitioners’ 1988 Federal income tax.
                                 - 5 -

     On March 29, 1995, respondent received an amended 1989

Federal income tax return from petitioners.   The amended return

has not been included in the record, but apparently the

deductions previously claimed and disallowed were increased,

other deductions not claimed on the original return were claimed,

and petitioners reported an income tax liability on the amended

return that was less than the income tax liability reported on

the original return.    We cannot tell whether or how the amended

return was processed.

     By the time the amended return was filed, petitioners and

other similarly situated taxpayers had cases pending in this

Court in which they disputed the Commissioner’s disallowances of

deductions similar to the deductions that gave rise to the

determination of petitioners’ 1989 deficiency.   Furthermore,

legislation had been proposed that would have partially or fully

allowed for the types of deductions in dispute in the Tax Court

cases.   These cases were held in suspense for several years

pending enactment of the legislation; however, the proposed

legislation was never enacted.    The Tax Court cases were resolved

by agreement during 2000 after further settlement negotiations

with the Commissioner’s Appeals Office (the settlement position).

     The settlement position was applied to petitioners’ 1990

year, which apparently had been examined before that time.     As a
                               - 6 -

result, petitioners agreed to a deficiency and a section 6662(a)

penalty totaling $3,506 for 1990.

     On June 27, 2000, respondent received a payment of $3,5066

from petitioners designated to be applied to their 1989

liability.   The transmittal letter with which the payment was

sent expressly references the year 1989.     As a result of this

payment, interest of $15.75 ($8.61 plus $7.14 in interest that

had accrued from March 26, 1993, until July 14, 2000) was

assessed and paid, leaving petitioners’ account for that year

overpaid by $3,490.25.

     At the time the above-referenced transmittal letter and

payment were received, respondent also received a Form 843, Claim

for Refund and Request for Abatement, from petitioners (the

abatement claim).   Block 5 of the abatement claim is designated

“Explanation and additional claims.”   Instructions following the

designation direct the taxpayer to “Explain why * * * this claim

should be allowed, and show computation of tax refund or

abatement of interest, penalty or addition to tax.”     In the

designated area following these instructions on the abatement

claim, petitioners inserted the following:



     6
        This amount is erroneously referred to as “$4,506" in a
request for finding of fact included in respondent’s brief.
Petitioners, in their reply brief, agreed to respondent’s
erroneous request.
                               - 7 -



     Our 1989 return was audited, brought to the Appeals
     Office, and in Tax Court. We have a good faith belief
     that delays occurred in preforming [sic] ministerial
     acts by an officer or employee of the Internal Revenue
     Service during that period. The occurance [sic] of
     such delays requires the abatement of the assessment of
     interest for those particular periods. Furthermore,
     throughout much of this period legislation was pending
     which would have substantially affected the treatment
     of specific deductions. Accordingly, the Service
     postponed consideration of these matters. Further, a
     death in the family of our legal counsel resulted in an
     additional delay in consideration of our case. In
     light of the ministerial delays, and as well as our
     reliance on the actions of Congress, the failure to
     abate interest in our circumstances would constitute
     grossly unfiar [sic] treatment and impose on us an
     undue hardship.

Elsewhere on the abatement claim, petitioners indicate that the

amount to be “refunded or abated” is “approximately [$]2,400”.

In the area designated “Period--prepare a separate Form 843 for

each tax period”, petitioners entered “from March 8, 1993 to

October, 1999.”   Try as we have, we are unable to appreciate the

relevance of this period to the relief requested by petitioners

either in the abatement claim or in this proceeding.   Block 4a of

the abatement claim provides for a check-the-box entry if the

request is for abatement or refund of “interest caused by IRS

errors or delays”.   This box is left blank, as is the following

area where the “dates of payment” should have been inserted.

     Despite its many infirmities, respondent considered the

abatement claim as a request for abatement of all interest that

had accrued with respect to petitioners’ 1989 Federal income tax

liability.   As earlier noted, with the exception of $8.61, all of
                                - 8 -

that interest had been paid as of March 26, 1993.   By letter

dated January 24, 2001, respondent notified petitioners that

$7.14 of interest that accrued from March 26, 1993, to July 14,

2000, would be abated but denied petitioners’ request for

abatement of interest that had accrued before March 26, 1993.    By

letter dated February 23, 2001, petitioners requested that

respondent’s Appeals Office reconsider the portion of their

abatement claim that had been denied.   In this letter,

petitioners identify “a number of delays”, one of which

erroneously lists the date of the revenue agent’s report as

December 16, 1992, when, in fact, as noted above, the report was

issued on December 16, 1991.    The letter goes on to allege that

petitioners’ abatement claim (received by respondent on June 27,

2000) “was filed * * * shortly after assessment of the interest

in this case”.    As noted, with the exception of $8.61, all of the

interest that had previously accrued was assessed and paid as of

March 26, 1993.   Petitioners’ use of the term “shortly” is

expansive, to say the least.

     The Appeals officer assigned to the matter prepared a

detailed chronology of events relevant to the determination of

petitioners’ 1989 Federal income tax liability.   Petitioners

apparently were provided a copy of this chronology before

February 23, 2001, as their letter to respondent on that date

makes reference to it.   In a note included within the chronology
                                - 9 -

the Appeals officer observes that the $3,506 payment that

respondent applied to 1989 pursuant to petitioners’ designation

is the amount agreed upon in settlement of petitioners’ 1990

Federal income tax liability.   According to the Appeals officer,

“it might have been * * * [petitioners’] intent to file an

interest abatement request with respect to TY1990 rather than

TY1989".   Neither party commented on this observation in any

document submitted in this proceeding.

                            Discussion

     It appears to us that the observation of the Appeals officer

is well made.   Nevertheless, taking our lead from the parties, we

ignore the possibility that this proceeding results from a

mistaken reference to 1989 and consider whether respondent’s

failure to abate some of the interest applicable to petitioners’

Federal income tax for that year is an abuse of discretion.     For

the following reasons, we hold that it is not.

     In general, interest on a Federal income tax liability,

including a deficiency, begins to accrue on the due date of the

return and continues to accrue, compounding daily, until payment

is made.   See secs. 6601(a), 6622.

     The Commissioner has the authority to abate the assessment

of interest on a deficiency or payment of income tax if the

accrual of such interest is attributable to an error or delay by

an official or employee of the Internal Revenue Service in
                                - 10 -

performing a ministerial act.    Sec. 6404(e)(1).7   A ministerial

act means a procedural or mechanical act that does not involve

the exercise of judgment.   Lee v. Commissioner, 113 T.C. 145

(1999); sec. 301.6404-2T, Temporary Proced. & Admin. Regs., 52

Fed. Reg. 30163 (Aug. 13, 1987).    The relief contemplated by

section 6404(e) requires the existence of some “erroneous or

dilatory performance of a ministerial act” by the Commissioner’s

employee that resulted in the interest that the taxpayer is

seeking to have abated.

     In this case, petitioners state that they have a “good faith

belief that delays occurred in performing ministerial acts”, but

they have nowhere identified those ministerial acts or what

delays were caused as a result of those unidentified ministerial

acts.

     We have reviewed the history of the examination of

petitioners’ 1989 Federal income tax return as set forth in the

Appeals officer’s chronology of events and find nothing out of

the ordinary in either the sequence of events or the passage of

time from event to event.   Petitioners’ 1989 Federal income tax



     7
        Sec. 6404(e) was amended by sec. 301 of the Taxpayer Bill
of Rights 2, Pub. L. 104-168, 110 Stat. 1457 (1996), to permit
the Commissioner to abate interest with respect to an
“unreasonable” error or delay resulting from “managerial” or
ministerial acts. The amendment is effective for interest
accruing with respect to deficiencies or payments for tax years
beginning after July 30, 1996, and is therefore inapplicable
here.
                                - 11 -

return was timely filed and selected for examination

approximately 1 year later.   Approximately 7 months later the

revenue agent’s report was issued proposing adjustments similar

to those made in other years.    Less than a year after the return

had been selected for examination, and within months of the

issuance of the revenue agent’s report, respondent issued a

notice of deficiency determining a deficiency in petitioners’

1989 Federal income tax.8   Petitioners failed to timely petition

this Court in response to that notice, and the deficiency, a

penalty, an addition to tax, and interest were appropriately

assessed.   We find no delay in the assessment process as outlined

above, much less any dilatory or erroneous act by respondent’s

employee in performing a ministerial act that caused any delay.

     The interest that accrued on petitioners’ 1989 Federal

income tax liability resulted from petitioners’ failure to pay

their 1989 Federal income tax liability when due.   Section

6404(e) does not authorize the abatement of interest upon that

ground, and respondent’s refusal to grant such an abatement is

not an abuse of discretion.   See Donovan v. Commissioner, T.C.

Memo. 2000-220; Douponce v. Commissioner, T.C. Memo. 1999-398.



     8
        We note that an “unreasonable delay in the issuance of a
statutory notice of deficiency after the IRS and the taxpayer
have completed efforts to resolve the matter” could be a ground
for abatement of interest under sec. 6404(e), see H. Rept. 99-
426, at 845 (1985), 1986-3 C.B. (Vol. 2) 1, 845, but there was no
such delay in this case.
                        - 12 -

To reflect the foregoing,

                                  Decision will be

                             entered for respondent.
