                        T.C. Memo. 2005-221



                      UNITED STATES TAX COURT



                 MICHAEL W. BRAUN, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 16413-03.               Filed September 21, 2005.



     Michael W. Braun, pro se.

     Dennis R. Onnen, for respondent.



             MEMORANDUM FINDINGS OF FACT AND OPINION


     KROUPA, Judge:   Respondent determined that petitioner was

not entitled to an abatement of interest under section 6404(e)1




     1
      All section references are to the Internal Revenue Code in
effect for the years at issue, and all Rule references are to the
Tax Court Rules of Practice and Procedure, unless otherwise
indicated.
                                 - 2 -

with respect to the Brauns’2 joint Federal income tax returns for

1994 and 1997.    The sole issue for decision is whether respondent

abused his discretion in failing to abate interest.    We hold that

respondent did not abuse his discretion.

                           FINDINGS OF FACT

     The parties have stipulated some of the facts, which are

incorporated in our findings by this reference.    Petitioner

resided in Grandview, Missouri, when he filed the petition.

The Brauns’ 1994 and 1997 Income Tax Returns

     Petitioner and his wife had consistently filed their income

tax returns and paid their income tax liabilities timely until

1994, when a series of events caused the Brauns to file returns

and pay their income tax liabilities late.    These events began

when petitioner lost his job in 1994.    Shortly thereafter,

petitioner was shot through the throat, lung, and shoulder by an

intruder burglarizing his home in early 1995.    Petitioner

survived, but the effect on his employability and finances was

devastating.     After spending 8 days on life support, petitioner

spent another 17 days in the hospital and approximately 7 more

months bedridden, undergoing surgeries, and receiving extensive

therapy.


     2
      The Brauns are petitioner and his wife, Tammy J. Braun, who
filed joint Federal income tax returns. Because petitioner filed
the petition is his name only, we refer to the Brauns when
describing their joint tax liabilities and actions they took
together. References to petitioner are to petitioner
individually.
                                 - 3 -

     Petitioner finally began to get his life back on track about

3 years later, and in 1998 he filed the Brauns’ tax returns for

1994 through 1997 and submitted an offer in compromise to

respondent for the outstanding tax liabilities and interest.3

     Specifically, petitioner filed the Brauns’ prior 4 years of

income tax returns on September 13, 1998.    The Brauns were due

refunds for 1995 and 1996.   After crediting the refunds against

their 1994 tax liability, the Brauns had tax liabilities left

outstanding for 1994 and 1997.    Respondent previously sent the

Brauns a deficiency notice for 1994.     When the Brauns failed to

respond, respondent assessed an amount the Internal Revenue

Service (IRS) determined to be the Brauns’ 1994 tax liability and

$2,028.31 in interest.4

     Respondent assessed additional tax and interest after the

Brauns filed their income tax return for 1994.5    Respondent also

assessed the tax reported on their income tax return for 1997



     3
      The Brauns were due refunds for 1995 and 1996 that
respondent applied against their 1994 tax liability. Income tax
credits totaling $2,294.05 from 1995 and 1996 were applied to the
Brauns’ 1994 account, and respondent abated $197.21 of interest.
Income tax credits totaling $2,832.47 from 1999-2002 were also
applied to the Brauns’ 1994 account.
     4
      The amount assessed for 1994 included a $7,057 income tax
deficiency, a $1,220.75 addition to tax under sec. 6651(a)(1) for
failure to file timely, and a $239.13 addition to tax under sec.
6654 for failure to pay estimated tax.
     5
      The late-filed return for 1994 reflected a $12,311.60 tax
liability that resulted in an additional assessment for 1994 of
$5,254 in tax and $1,219.06 in interest.
                                 - 4 -

plus interest.6   In addition, respondent made assessments of $800

for 1994 and $74.10 for 1997 against the Brauns in August 2003.

Offer in Compromise

     Petitioner submitted his initial offer in compromise in the

form of a letter summarizing his job loss and physical injury.

In response, respondent withdrew penalties against the Brauns for

1994, except the estimated tax addition, and sent petitioner

proper forms for filing an offer in compromise.   Respondent sent

to petitioner a Form 433-F, Collection Information Statement, and

Form 656, Offer In Compromise.    Petitioner completed and returned

these forms to respondent, offering to compromise the Brauns’ tax

liability for $2,500.   At that time, the Brauns’ tax liabilities

totaled approximately $11,000, including interest.

     Respondent later requested a longer information statement

from petitioner, this time a Form 433-A, Collection Information

Statement for Wage Earners and Self-Employed Individuals.7

Petitioner refused to submit the longer Form 433-A, insisting

instead that respondent use the shorter Form 433-F, which he had

already submitted.




     6
      The late-filed return for 1997 reflected a $4,317 tax
liability.
     7
      Form 433-A, Collection Information Statement for Wage
Earners and Self-Employed Individuals, is six pages compared to
the one-page Form 433-F, Collection Information Statement,
respondent initially sent the Brauns.
                               - 5 -

     Because the Brauns had individual retirement accounts

totaling more than $46,000 but offered to pay approximately

$2,500 of an $11,000 tax liability, including interest,

respondent determined that petitioner’s offer was too low.

Respondent rejected petitioner’s offer in compromise on

collectibility and liability grounds.   Respondent relied upon the

shorter Form 433-F, that petitioner had originally submitted, in

making his determination.   Petitioner appealed.

Appeal Offer in Compromise Determination

     The Appeals Office (Appeals) scheduled a conference with

petitioner to discuss his offer in compromise.     Petitioner

canceled the meeting but increased his offer in compromise from

$2,500 to $3,600.

     Appeals requested another conference with petitioner.

Petitioner objected to the conference because he mistrusted

respondent.   Petitioner stated that he preferred all

communication be in the form of written correspondence.

Petitioner also charged respondent with making false statements,

corresponding for the sole purpose of “finding funds” rather than

to consider his offer, retaliating against him because he had

exposed respondent’s “gestapo” tactics, and discriminating

against him on account of sex, race, age, and marital status.
                                 - 6 -

     Respondent sought to reassure petitioner by letter that

Appeals was independent of other offices in the IRS.   Respondent

explained that petitioner could openly discuss matters with

Appeals, that he had the right to legal representation at a

conference, and/or he could be accompanied by another person.

Again, petitioner refused respondent’s gesture and insisted upon

a written record of communication.

     Petitioner raised his offer in compromise again, this time

to the full amount of the Brauns’ tax liabilities for 1994 and

1997, excluding interest.8   Petitioner’s amended offer also

required that respondent admit to having committed errors.

Investment Account Information

     During consideration of petitioner’s offers, Appeals

requested the “current value” of petitioner’s 401(k) account.9

Twice petitioner sent respondent the current “vested” amount

rather than the “current value.”    Respondent’s Taxpayer Advocate

(the TA) later explained the distinction to petitioner.   The TA

also told petitioner that respondent should have requested “all”


     8
      At that time, petitioner computed his full tax liability,
less interest, at $5,180.12. Petitioner later stated that his
full tax liability, less interest, was $4,586.27. Each time that
petitioner amended his offer in compromise, he did so by letter
to respondent, rather than by submitting an updated Form 656,
Offer in Compromise.
     9
      On Mar. 25, 2002, petitioner replied that the current
vested balance in his 401(k) account was $1,671.59 as of Dec. 31,
2001. Later, petitioner reported that the current vested balance
in his 401(k) account was $4,384.54 as of Oct. 30, 2002.
                               - 7 -

information regarding the Brauns’ pension plans and investment

accounts rather than only petitioner’s 401(k) information.10    The

TA relayed this to Appeals, and Appeals mailed petitioner an

amended letter requesting the correct information.   Petitioner

reported approximately $46,000 in investments as individual

retirement accounts.11

     After reconsideration, Appeals affirmed respondent’s initial

determination rejecting petitioner’s offer in compromise for

$2,500.   Appeals also rejected petitioner’s final offer to pay

the Brauns’ full tax liabilities for 1994 and 1997, excluding

interest.

Claim for Abatement

     Because petitioner’s last offer in compromise amounted to

100 percent of the Brauns’ tax liability, petitioner’s claim

essentially took the form of an interest abatement claim.

Respondent therefore requested that petitioner submit a Form 843,

Claim for Refund and Request for Abatement, in connection with

his offer in compromise.   In the interest abatement request,

petitioner alleged errors and undue delay in respondent’s




     10
      The Brauns had previously submitted investment account
information in their Form 433-F on July 22, 1999.
     11
      The Brauns reported $46,468 in individual retirement
accounts as of Jan. 6, 2003. The Brauns reported $44,609 as of
July 22, 1999.
                              - 8 -

consideration of his offer in compromise.    Respondent denied

petitioner’s interest abatement claim.12

     The entire course of events, from petitioner’s first request

to compromise their tax liability through respondent’s final

denial of his claim, took more than 3 years.

Notice of Intent To Levy and Payment

     Respondent sent the Brauns a notice of intent to levy on

March 24, 2003, and a Form 668-W, Notice of Levy on Wages,

Salary, and Other Income, on July 2, 2003.    The Brauns paid

respondent $8,409.92 on July 15, 2003, approximately 5 months

after petitioner received respondent’s final determination

rejecting his offers in compromise.    The Brauns’ payment

satisfied their tax liabilities for 1994 and 1997, but left

outstanding accrued and unassessed interest.13   Petitioner

appealed to our Court respondent’s determination not to abate

interest for 1994 and 1997.




     12
      On Feb. 10, 2003, the Appeals Office also notified the
Brauns that their interest abatement claim would be denied.
Petitioner received a letter from respondent denying his interest
abatement claim 2 days later.
     13
      Of the Brauns’ $8,409.92 payment, respondent applied
$8,087.71 to the Brauns’ 1994 account and $322.21 to the Brauns’
1997 account.
                               - 9 -

                              OPINION

     We are asked to decide whether respondent abused his

discretion in denying petitioner’s interest abatement claim.

Interest on a deficiency in income tax generally begins to accrue

on the due date of the tax return and continues to accrue,

compounding daily, until payment is made.   See secs. 6601(a),

6622(a).

     This Court may order an abatement of interest if there is an

abuse of discretion by the Commissioner in failing to abate

interest.   See sec. 6404(h) (formerly sec. 6404(g)); Lee v.

Commissioner, 113 T.C. 145, 149 (1999).    In order to demonstrate

an abuse of discretion, a taxpayer must prove that the

Commissioner exercised his discretion arbitrarily, capriciously,

or without sound basis in fact or law.    See Rule 142(a); Lee v.

Commissioner, supra; Woodral v. Commissioner, 112 T.C. 19, 23

(1999).

     The Commissioner may abate interest if the taxpayer

identifies both an error or delay in payment of tax caused by a

ministerial or managerial act of respondent and the period of

time over which interest should be abated as a result of the

error or delay.   See sec. 6404(e) (as currently in effect);

Donovan v. Commissioner, T.C. Memo. 2000-220; see also Krugman v.

Commissioner, 112 T.C. 230 (1999); Douponce v. Commissioner, T.C.

Memo. 1999-398.
                              - 10 -

     In 1996, Congress amended section 6404(e) to allow abatement

attributable to erroneous or dilatory performance by respondent

of managerial acts, but Congress made the amendment effective

only for interest accruing on tax deficiencies or payments for

tax years beginning after July 30, 1996.   The former standard for

interest abatement, therefore, applies to 1994, while the amended

provision applies to petitioner’s interest abatement claim

regarding 1997.

     Specifically, for 1994 the Commissioner may abate the

assessment of interest with respect to an “error or delay” by an

officer or employee of the IRS in performing a “ministerial act.”

Sec. 6404(e)(1).   For 1997, the Commissioner may abate the

assessment of interest with respect to any “unreasonable error or

delay” resulting from “managerial” as well as ministerial acts.

Sec. 6404(e)(1); see Taxpayer Bill of Rights 2, Pub. L. 104-168;

sec. 301(a)(1) and (2), 110 Stat. 1457 (1996) (effective for

interest accruing with respect to deficiencies or payments for

taxable years beginning after July 30, 1996).

     A “ministerial act” is 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

discretionary decisions in the case have occurred.   Goblirsch v.

Commissioner, T.C. Memo. 2005-78 (citing Lee v. Commissioner,

supra, and Donovan v. Commissioner, T.C. Memo. 2000-220); sec.
                              - 11 -

301.6404-2T(b)(1), Temporary Proced. & Admin. Regs., 52 Fed. Reg.

30163 (Aug. 13, 1987); sec. 301.6404-2, Proced. & Admin. Regs.

     In contrast, a “managerial act” is an administrative act

that occurs during the processing of a taxpayer’s case and that

involves the temporary or permanent loss of records or the

exercise of judgment or discretion relating to management of

personnel.   Sec. 301.6404-2(b)(1), Proced. & Admin. Regs.

     Congress did not intend the interest abatement statute to be

used routinely.   Accordingly, we grant abatement only “where

failure to abate interest would be widely perceived as grossly

unfair.”   Lee v. Commissioner, supra; 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.    Further, the mere passage

of time does not establish an error or delay by the Commissioner.

See Lee v. Commissioner, supra at 150.

     Petitioner contends that respondent committed several errors

in processing his offers in compromise.     These errors, petitioner

asserts, include respondent’s conflicting requests for an

information return, and respondent’s request for all the Brauns’

investment account information when respondent had earlier

requested only 401(k) information.     In addition, petitioner

alleges that respondent falsely claimed that petitioner did not
                                   - 12 -

respond to an earlier phone inquiry by respondent.14       These

errors, petitioner claims, account for the undue delay in

respondent’s denial of his offers in compromise.        Consequently,

petitioner contends that respondent should have abated all

interest related to the Brauns’ tax liabilities for 1994 and

1997.        We address each of petitioner’s contentions in turn.

1.   Whether Petitioner Established an Error or Delay by
     Respondent in Performing a Ministerial or Managerial Act

        For petitioner to prevail, he must first identify an error

or delay by respondent in the performance of a ministerial act

for 1994 or a ministerial or managerial act for 1997.        Examples

of ministerial errors or delays include an unreasonable delay in

the transferral of a case among IRS district offices or a delay

in the issuance of a deficiency notice after all discretionary

decisions in the case have occurred.        See sec. 301.6404-2(c),

Examples (1) and (2), Proced. & Admin. Regs.        Petitioner has

alleged no delays attributable to the transferral of his case

among IRS offices or a delay in issuing the Brauns a notice of



        14
      Petitioner cites, as an example of respondent misleading
him, a call from respondent on Mar. 21, 2000, requesting pay
stubs and Form 433-A from petitioner. In response, petitioner
sent respondent two letters on Apr. 1 and Apr. 4, 2000. In a
letter on Apr. 5, 2000, respondent stated, among other things,
that he had “received no response” from petitioner to his earlier
phone call. Because respondent sent the letter merely 4 days
after petitioner’s earlier letter, however, it is plausible that
respondent had not received petitioner’s letters before he sent
his response.
                               - 13 -

deficiency.    Petitioner has alleged, therefore, no ministerial

delays in this case.

     Managerial errors or delays, on the other hand, include

situations involving the loss of records or the exercise of

judgment relating to management of personnel.    See sec. 301.6404-

2(c), Proced. & Admin. Regs.    Delays involving the exercise of

such judgment may result from the Commissioner sending an IRS

agent to training or granting sick leave to an agent for an

extended period without reassigning the agent’s cases.    See sec.

301.6404-2(c), Examples (3), (4), (5), (10), Proced. & Admin.

Regs.

     Petitioner alleges that respondent committed a managerial

mistake in requesting that petitioner submit a Form 433-F, then

requesting that petitioner submit Form 433-A, which is

substantially longer.    One month after respondent requested the

longer form, however, respondent told petitioner that he would

proceed with his determination based upon the shorter form, as

petitioner requested.    The delay, therefore, was not longer than

a month.

     Moreover, an abatement of interest is not warranted where a

significant aspect of the delay is attributable to petitioner.

See sec. 6404(e)(1); sec. 301.6404-2(c), Example (13), Proced. &

Admin. Regs.    Here, petitioner originally submitted his offer in

compromise without proper forms, he increased the amount of his
                              - 14 -

offer twice, he canceled one conference with respondent and

refused others, and he failed to submit all the information that

respondent requested.   We find that these actions constituted a

significant cause of the delay in processing petitioner’s offers

in compromise.   Petitioner’s remaining allegations that

respondent misled him, discriminated against him, and retaliated

against him are not supported by the record.

2.   Whether Petitioner Established a Correlation Between a
     Specific Period of Delay in Payment and an Error or Delay by
     Respondent

     Further, section 6404(e) requires that petitioner not only

identify a mistake by respondent, but link the mistake to a

specific period of delay in payment for which interest should be

abated.   Petitioner has alleged no specific period during which

interest should be abated, other than objecting generally to all

interest flowing from the Brauns’ tax liabilities for 1994 and

1997.

     The requisite correlation between an error or delay

attributable to the Commissioner and a specific period of time

is, for the most part, missing where a taxpayer requests that all

interest with respect to the deficiencies be abated.   See Donovan

v. Commissioner, T.C. Memo. 2000-220.    Petitioner’s request

amounts to a claim for an exemption from interest, rather than a

claim for abatement of interest.   Id.   Congress did not intend

the statute to be used “routinely to avoid payment of interest.”
                               - 15 -

See H. Rept. 99-426, supra at 844, 1986-3 C.B. (Vol. 2) at 844;

S. Rept. 99-313, supra at 208, 1986-3 C.B. (Vol. 3) at 208.

3.     Whether Petitioner Would Have Paid the Tax Liability Earlier
       but for Respondent’s Error

       Finally, no abatement is warranted where, notwithstanding a

mistake by the Commissioner, no earlier payment would have been

made.    See Wright v. Commissioner, T.C. Memo. 2004-69, affd. 125

Fed. Appx. 547 (5th Cir. 2005); see also Spurgin v. Commissioner,

T.C. Memo. 2001-290; Bo v. Commissioner, T.C. Memo. 2005-150.

Interest accruing merely because a taxpayer fails to pay the

assessed tax is not subject to abatement under section 6404(e).

Ahmaogak v. Commissioner, T.C. Memo. 2003-238; Donovan v.

Commissioner, supra; Douponce v. Commissioner, T.C. Memo. 1999-

398.    Petitioner has not demonstrated that the Brauns would have

paid their tax liabilities for 1994 and 1997 earlier but for

respondent’s actions.

4.     Conclusion

       We recognize that petitioner underwent severe physical

trauma, as well as job loss before and after his injury, all of

which contributed to the Brauns’ failing to file or pay their

income tax timely for 1994 or 1997.     Our jurisdiction is limited,

however, to determining whether respondent abused his discretion

in not abating interest.

       From our review of the record, petitioner has not shown that

respondent was dilatory in performing a ministerial or managerial
                               - 16 -

act.    In fact, our review reflects that respondent followed

regular IRS procedures in processing petitioner’s various offers

in compromise and that interest accruals for 1994 and 1997 were

merely the result of petitioner’s failure to pay the entire

balance owed.    We therefore conclude that respondent did not

abuse his discretion by denying petitioner’s request to abate

interest on the Brauns’ unpaid tax liabilities for 1994 and 1997.

Accordingly, we sustain respondent’s determination.

       In reaching our holding, we have considered all arguments

made, and, to the extent not mentioned, we conclude that they are

moot, irrelevant, or without merit.

       To reflect the foregoing,


                                           Decision will be entered

                                      for respondent.
