                         T.C. Memo. 1999-398



                      UNITED STATES TAX COURT



                    JOHN DOUPONCE, Petitioner v.
            COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 3756-98.              Filed December 7, 1999.



     John Douponce, pro se.

     Marilyn Devin, for respondent.



              MEMORANDUM FINDINGS OF FACT AND OPINION


     RUWE, Judge:   On December 23, 1997, respondent issued a

final determination disallowing petitioner's claim to abate

interest.   Petitioner timely filed a petition under section

6404(g)1 and Rule 280.   The issue for decision is whether


     1
      Sec. 6404(g) was redesignated as sec. 6404(i) by the
                                                   (continued...)
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respondent's denial of petitioner's request to abate interest was

an abuse of discretion.

                             FINDINGS OF FACT

     Some of the facts have been stipulated and are so found.

The stipulation and attached exhibits are incorporated herein by

this reference.      Petitioner resided in Los Angeles, California,

when the petition was filed.          Petitioner filed delinquent Federal

income tax returns for 1988 and 1990 on or about August 25, 1993.

Petitioner filed a delinquent Federal income tax return for 1991

on or about August 2, 1994.          The amounts of tax shown on the

returns, tax withheld, and interest and penalties assessed for

these years are as follows:

                        Credit for     Late Filing     Late Payment
         Tax Reported       Tax          Penalty          Penalty     Interest
 Year     & Assessed     Withheld       Assessed         Assessed     Assessed
 1988      $11,750       $8,313           $773.33        $859.25      $2,252.08
 1990       13,105       11,776               299.03      199.35        369.03
 1991        6,205        4,687               341.55      220.11        356.14


From May 1994 to September 1995, petitioner made monthly payments

of $500, all of which were applied to his 1988 liabilities.                In

April 1995, a credit (from petitioner's 1994 taxable year) of



     1
      (...continued)
Internal Revenue Service Restructuring & Reform Act of 1998 (RRA
1998), Pub. L. 105-206, secs. 3305(a), 3309(a), 112 Stat. 685,
743, 745. 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.
                                - 3 -

$995 was applied to his account for 1988.   On March 18, 1996, a

credit (from petitioner's 1995 taxable year) of $809 was

similarly applied to 1988.   When the March 18, 1996, payment was

applied, petitioner's entire liability for tax and penalties for

1988 was extinguished.   The sum of $252.63, the balance after

satisfying the tax and penalty liability, was applied to interest

that had accrued for 1988.   In March 1996, petitioner submitted

an Offer in Compromise with respect to the balances owed for

1988, 1990, and 1991.    On May 9, 1996, after additional exchanges

of correspondence between petitioner and respondent, petitioner's

Offer in Compromise was rejected on the ground that there was no

doubt as to liability.   Also on or about May 9, 1996, petitioner

telephoned respondent's Glendale, California, office to ascertain

the balance then outstanding on his accounts for 1988, 1990, and

1991.   An employee of respondent told petitioner that the

following amounts had been assessed and remained outstanding:

1988--nothing; 1990--$2,196; and for 1991--$2,492.   Respondent’s

employee also told petitioner to add $100 to each of these

amounts.   Petitioner understood these amounts to be the full

amounts of his liabilities for these years, including all tax

due, penalties and interest.   On May 30, 1996, petitioner paid

respondent the amounts of $2,296 for 1990 and $2,592 for 1991.

These payments were credited to petitioner’s 1990 and 1991

accounts on May 30, 1996.    On June 24, 1996, respondent assessed
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a $100 failure to pay penalty for 1990 and 1991.         At that point

all assessments for 1988, 1990, and 1991 had been paid, however,

some additional interest for each of the years 1988, 1990, and

1991 had not been assessed.    On November 4, 1996, respondent

issued a Notice of Intent to Levy with respect to unpaid interest

in the following amounts:

           Year:        1988             1990     1991

           Amount:      $676             $600     $491

Petitioner paid without delay.    Petitioner sought a refund of the

interest and his claim was denied.       Petitioner appealed and on

March 13, 1997, respondent abated part of the $100 late payment

penalties which petitioner had added to his May 1996 payments.

Insofar as petitioner's dispute constituted a claim for refund of

interest, respondent determined that petitioner was not entitled

to relief pursuant to section 6404(e) and mailed petitioner a

Notice of Disallowance.

                               OPINION

     Petitioner argues that respondent abused his discretion in

not abating the interest that accrued on petitioner’s 1988, 1990,

and 1991 liabilities.   Petitioner argues he was provided with

amounts of his total liability for tax, penalties, and interest

in a telephone conversation with an employee of respondent on May

9, 1996.   Petitioner contends these amounts when paid should have

satisfied his liability for interest.
                              - 5 -

     Under section 6404(e)(1)2, the Commissioner may abate part

or all of an assessment of interest on any deficiency or payment

of income tax to the extent that any error or delay in payment is

attributable to erroneous or dilatory performance of a

ministerial act by an officer or employee of the Commissioner.

For abatement to be appropriate, the taxpayer must not have

contributed significantly to the error or delay.   Congress

intended for the Commissioner to abate interest under section

     2
      Sec. 6404(e)(1), as enacted in 1986 and as applicable here,
provides:

          (e) Assessments of Interest Attributable to Errors
     and Delays by Internal Revenue Service.--

               (1) In general.--In the case of any
          assessment of interest on–

                    (A) any deficiency attributable in whole
               or in part to any error or delay by an
               officer or employee of the Internal Revenue
               Service (acting in his official capacity) in
               performing a ministerial act, or

                    (B) any payment of any tax described in
               section 6212(a) to the extent that any delay
               in such payment is attributable to such
               officer or employee being dilatory in
               performing a ministerial 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.
                                 - 6 -

6404(e) "where failure to abate interest would be widely

perceived as grossly unfair" but not that it "be used routinely

to avoid payment of interest".    H. Rept. 99-426, at 844 (1985),

1986-3 C.B. (Vol. 2) 1, 844; S. Rept. 99-313, at 208 (1986),

1986-3 C.B. (Vol. 3) 1, 208.

     Prior to contacting respondent to obtain "payout" amounts on

May 9, 1996, there was no erroneous or dilatory performance of a

ministerial act by an officer or employee of the Commissioner

that contributed to a delay or error in the payment of the

interest which had accrued on petitioner's outstanding tax

liabilities.   Since there was no erroneous or dilatory

performance of a ministerial act, the Commissioner lacked

authority to abate interest.   Under these circumstances, it can

hardly be an abuse of his discretion to refuse to abate interest

that accrued prior to May 9, 1996.

     For the period from May 9 to May 30, 1996, when petitioner

made his payments of $2,296 and $2,592, any interest which

accrued was solely due to petitioner's failure to pay his

outstanding tax liabilities.   Again in these circumstances there

was no erroneous or dilatory performance of a ministerial act and

the Commissioner lacked authority to abate interest.

     For the period from May 30 to November 4, 1996 (when

respondent finally notified petitioner of additional interest by

issuing a Notice of Intent to Levy), the facts dictate a
                                 - 7 -

different outcome.   The Commissioner's refusal to abate the

interest on interest after all of petitioner's liability for tax

and penalties had been satisfied is an abuse of discretion.

Petitioner asked an employee of respondent what the "total amount

due" was for 1988, 1990, and 1991.       Respondent’s employee told

petitioner the total amount due, and petitioner promptly paid

those amounts.   However, the employee did not include all of the

accrued but unassessed interest in the amounts given to

petitioner.   Petitioner promptly discharged his liability for

interest when he was notified of it on November 4, 1996.       It is

reasonable to assume the only reason for the delay of in excess

of 5 months was caused by respondent's failure to tell petitioner

the correct amounts due when petitioner requested that

information on May 9, 1996.   Respondent acknowledges on brief

"that, under some circumstances, giving an incorrect payout

figure may constitute a ministerial act and respondent may abate

interest attributable to that act."       In the circumstances of this

case, the Commissioner should have abated the interest on unpaid

interest that accrued for the period from May 30 to the date on

which petitioner made full payment.       Respondent’s failure to do

so was an abuse of discretion.



                                              Decision will be entered

                                         pursuant to the foregoing.
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