                  T.C. Memo. 2000-141



                UNITED STATES TAX COURT



              ROBERT BANAT, Petitioner v.
     COMMISSIONER OF INTERNAL REVENUE, Respondent



Docket No. 2237-97.                     Filed April 14, 2000.



     P filed a petition for a determination that R’s
failure to abate interest under sec. 6404(e), I.R.C.,
with respect to petitioner’s 1985, 1986, and 1987
taxable years was an abuse of discretion and for an
abatement order.
     Held: P has not established any erroneous or
dilatory ministerial acts by R giving rise to the
assessment of interest after P was first contacted in
writing about the deficiency and before interest was
assessed.



Hedy P. Forspan, for petitioner.

Thomas J. Kerrigan, for respondent.
                                - 2 -


                          MEMORANDUM OPINION

     HALPERN, Judge:   This case is before the Court for review of

respondent’s failure to abate interest.1       By notice dated

November 8, 1996, respondent made his final determination not to

abate interest with respect to petitioner’s 1985, 1986, and 1987

taxable (calendar) years.

     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.

     At the time the petition was filed, petitioner resided in

Brooklyn, New York.

     This case was submitted for decision without trial.         See

Rule 122.   The parties have agreed to a stipulation of facts (the

stipulation).   The stipulation, with attached exhibits, is

incorporated herein by this reference.     Certain other exhibits

were received into evidence.    We shall not here repeat the

stipulation or recite the contents of the other exhibits.         We

shall, however, summarize certain facts as an aid to

understanding our discussion.




     1
        A prior report in this case appears at Banat v.
Commissioner, 109 T.C. 92 (1997).
                               - 3 -


Background

     Petitioner filed his Federal income tax returns for 1985,

1986, and 1987 on May 15, 1986, August 16, 1987, and April 15,

1988, respectively.

     Petitioner was contacted in writing with respect to a

deficiency in his 1985 Federal income tax liability no later than

July 22, 1986.   He was contacted in writing with respect to a

deficiency in his 1986 Federal income tax liability no later than

November 1, 1988.   He was contacted in writing with respect to a

deficiency in his 1987 Federal income tax liability no later than

June 13, 1990.

     On March 19, 1992, with respect to petitioner’s 1985 taxable

year, respondent assessed an additional tax of $21,121 and

interest of $21,946.11.   Also, on March 19, 1992, with respect to

petitioner’s 1986 taxable year, respondent assessed an additional

tax of $6,418 and interest of $5,662.08.    On April 5, 1993, with

respect to petitioner’s 1987 taxable year, respondent assessed an

additional tax of $8,715 and interest of $6,617.74.

     On August 13, 1995, petitioner submitted three Forms 843,

Claim for Refund and Request for Abatement (the Forms 843), to

respondent, one each for his taxable years 1985, 1986, and 1987

each claiming an abatement of interest.    None of the Forms 843

specifies the amount of interest to be abated or the period

during which the interest to be abated accrued.    Respondent
                               - 4 -


treated the Forms 843 as claims for abatement of interest as

follows:

                  Claims for Abatement of Interest

      Taxable Year
     of Deficiency      Interest Accrual Period       Amount
          1985            4/15/86 to 3/19/92         $21,946
          1986            4/15/87 to 3/19/92           5,662
          1987            4/15/88 to 4/05/93           6,618

     On November 8, 1996, respondent made his final determination

not to abate interest with respect to petitioner’s 1985, 1986,

and 1987 taxable (calendar) years.

     The petition was filed on February 5, 1997.

Discussion

     In certain circumstances, the Secretary is authorized to

abate interest.   Section 6404(e)(1), prior to its amendment by

the Taxpayer Bill of Rights 2 (TBOR 2), Pub. L. 104-168,

sec. 301, 110 Stat. 1452, 1457 (1996), read as follows:

         SEC. 6404(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 * * * error
           or delay in such payment is attributable to such
           officer or employee being erroneous or dilatory in
           performing a ministerial act,
                                 - 5 -


     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.

     Among the amendments made to section 6404(e)(1) by the

TBOR 2 was the replacement in paragraph (1)(A) and (B) of the

expression “in performing a ministerial act” with the expression

“in performing a ministerial or managerial act”.    TBOR 2 sec.

301(a)(2).   (Emphasis added).   That amendment, however, applies

only to interest accruing with respect to deficiencies or

payments for tax years beginning after July 30, 1996.     See TBOR 2

sec. 301(c).   It is inapplicable to this case; therefore, the

Secretary’s authority to abate interest in this case is limited

to interest on any deficiency attributable in whole or in part to

any error or delay by any officer or employee of the Internal

Revenue Service (the Service) in performing a ministerial act.

See Woodral v. Commissioner, 112 T.C. 19, 25 n.8 (1999).

     Section 6404(g)2 authorizes this Court to determine whether

the Secretary’s failure to abate interest under section




     2
         Sec. 6404(g) is now sec. 6404(i).
                               - 6 -


6404(e)(1) was an abuse of discretion and, if the Court so

determines, to order an abatement.3

     Under section 6404(e)(1)(A), the Secretary has no authority

to abate an assessment of interest on a deficiency unless that

assessment is attributable in whole or in part to some error or

delay by an officer or employee (without distinction, employee)

of the Service in performing a ministerial act.      Unless the

Secretary has the authority under section 6404(e)(1)(A) to abate

an assessment of interest on a deficiency, we have no authority

under section 6404(g) to review his failure to abate such

interest.   The regulations interpreting section 6404(e) define

the term “ministerial act” as “a procedural or mechanical act

that does not involve the exercise of judgment or discretion, and

that occurs during the processing of a taxpayer's case after all



     3
         In pertinent part, sec. 6404(g) provides:

          SEC. 6404(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.

     Petitioner meets the requirements of sec. 7430(c)(4)(A)(ii),
and the action was timely brought.
                               - 7 -


prerequisites to the act, such as conferences and review by

supervisors, have taken place.”    Sec. 301.6404-2T(b)(1),

Temporary Proced. & Admin. Regs., 52 Fed. Reg. 30163 (Aug. 13,

1987).4   Therefore, as a prerequisite to our reviewing the

Commissioner’s failure to abate an assessment of interest on a

deficiency, the taxpayer must show that such assessment is

attributable to some error or delay by an employee of the Service

in performing a ministerial act.    See sec. 6401(e)(1).    Moreover,

pursuant to the specific language of the last sentence of section

6404(e)(1), any such error or delay must be disregarded unless it

occurred after the taxpayer was first contacted in writing about

the deficiency.   Since, with respect to the assessment of

interest on a deficiency, the Secretary’s authority is to abate

the portion of the interest assessment attributable to such error

or delay, the error or delay must, of necessity, occur before the

assessment of the interest on the deficiency.    See sec.

6404(e)(1).   Therefore, for each taxable year for which the

taxpayer claims the Commissioner abused his discretion in failing

to abate the assessment of interest on a deficiency, the taxpayer

must show not only the assessment of interest attributable to



     4
          The final regulation under sec. 6404, as issued on
Dec. 18, 1998, contains the same definition of ministerial act.
The final regulation generally applies to interest accruing on
deficiencies or payments of tax for taxable years beginning after
July 30, 1996. See sec. 301.6404-2(b)(2), Proced. & Admin. Regs.
                                - 8 -


some error or delay of an employee in performing a ministerial

act but also that such error or delay occurred after the taxpayer

was first contacted in writing about the deficiency and before

the interest was assessed.    Petitioner has not made that

preliminary showing for any of the years here in question.5

     Petitioner’s brief contains a statement of facts that

reiterates the stipulation.    Petitioner has failed to establish

concrete incidences of error or delay in performing ministerial

acts that gave rise to any assessment of interest.    Petitioner

argues that the length of time from the start of respondent’s

examination of 1985 until the conclusion of respondent’s

examination of 1985, 1986, and 1987 automatically establishes

that there was an erroneous or dilatory ministerial act or acts.

We disagree.   See Lee v. Commissioner, 113 T.C. 145, 150 (1999)

("The mere passage of time in the litigation phase of a tax

dispute does not establish error or delay by the Commissioner in

performing a ministerial act.").    The length of time required by

petitioner's case was largely a function of the expansion of



     5
        For each of the taxable years in question, the relevant
periods during which petitioner must show error or delay in
performing a ministerial act (i.e., the period from first written
contact to assessment of the interest) are as follows:

          Taxable Year                 Period
              1985               7/22/86 to 3/19/92
              1986              11/01/88 to 3/19/92
              1987               6/13/88 to 4/05/93
                                - 9 -


respondent’s examination to other years, third-party summonses

made necessary by petitioner’s difficulties in supplying

documentation, respondent’s suspicion of civil fraud, and the

reopening of the examination at petitioner’s request after it was

settled in 1992.    None of those actions, which extended the time

of the examination, involve ministerial acts by respondent.      See,

e.g., Taylor v. Commissioner, 113 T.C. 206 (1999) (the

Commissioner's decision not to proceed with civil case during

criminal fraud investigation and prosecution was not a

ministerial act).

     Petitioner points to a misaddressed letter from respondent

to one of petitioner’s representatives as evidence of an error in

performing a ministerial act.    There was no error by respondent;

the letter was mailed to an incorrect address provided by

petitioner’s representative to respondent.      The letter was

remailed once respondent determined the correct address.

     Since petitioner has not established any erroneous or

dilatory ministerial acts, giving rise to the assessment of

interest, during the relevant timeframes, we conclude that

respondent’s failure to abate interest was not an abuse of his

discretion.


                                             Decision will be entered

                                        for respondent.
