                        T.C. Memo. 1999-376



                      UNITED STATES TAX COURT



                 CHARLES A. NERAD, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 13745-97.                Filed November 12, 1999.


     Charles A. Nerad, pro se.

     Karen N. Sommers, for respondent.




                        MEMORANDUM OPINION


     DAWSON, Judge:   This case was assigned to Special Trial

Judge Stanley J. Goldberg, pursuant to Rules 180, 181, and 183.1


1
     All Rule references are to the Tax Court Rules of Practice
and Procedure.
                               - 2 -

The Court agrees with and adopts the opinion of the Special Trial

Judge, which is set forth below.

               OPINION OF THE SPECIAL TRIAL JUDGE

     GOLDBERG, Special Trial Judge:    On January 29, 1997,

respondent issued a notice of final determination denying

petitioner's claim to abate interest for the taxable year 1992.

The only issue for decision is whether petitioner is entitled to

an abatement of interest pursuant to section 6404(e).2

     Petitioner contends that respondent abused his discretion by

failing to abate assessments of interest because (1) the income

that petitioner failed to report on his 1992 Federal income tax

return did not result from petitioner's error, (2) respondent

provided him with misinformation, and (3) respondent did not

promptly audit his income tax return for 1992 in light of the

disclosure on the return.

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

The stipulation of facts and the attached exhibits are

incorporated herein by this reference.    Petitioner resided in

Julian, California, when the petition in this case was filed.

     During 1992, petitioner was employed as a systems analyst by

the United States Navy.   In 1992, the Navy consolidated some of

its payroll processing centers.    As a result of the



2
     Section references are to the Internal Revenue Code in
effect for the year in issue.
                                - 3 -

consolidation, petitioner failed to receive a complete and

accurate Wage and Tax Statement, Form W-2 (wage statement), for

the year 1992.   Instead, petitioner received two wage statements

from his employer.    One wage statement properly reflects the

wages he received prior to the consolidation of the payroll

processing centers.    The other wage statement reflects the wages

of another taxpayer.    Petitioner stated that he repeatedly asked

his employer to provide him with a corrected wage statement.

     Petitioner and his wife, Rebecca Duncan, timely filed a

joint Federal income tax return for 1992 on April 15, 1993.      On

their joint 1992 Federal income tax return, petitioner and Ms.

Duncan reported total wages of $51,335.87.    This amount failed to

include all of the wages petitioner received in 1992.    Petitioner

alleges that he contacted the Internal Revenue Service (IRS)

prior to filing his 1992 Federal income tax return.    Petitioner

asserts that an IRS employee informed him that he should include

on his return a statement indicating that he did not receive an

accurate wage statement.    On their 1992 Federal income tax

return, petitioner and Ms. Duncan included such a statement.      On

their 1992 Federal income tax return, petitioner and Ms. Duncan

also failed to report interest income in the amount of $5.

     On May 10, 1995, respondent sent a letter to petitioner

seeking information about the unreported income.    In a letter

dated May 23, 1995, petitioner answered respondent's inquiry and
                              - 4 -

stated that during 1992 his employer's payroll processing center

had moved and that he did not have an accurate wage statement

when he filed his income tax return for 1992.    Petitioner further

explained that he completed the 1992 income tax return to the

best of his ability and that he had requested a corrected wage

statement.

     On August 2, 1995, respondent sent a letter to petitioner

and Ms. Duncan proposing an income tax deficiency for 1992.    On

August 10, 1995, petitioner again informed respondent that he had

not received a corrected wage statement from his employer and

that when, and if, he received a corrected wage statement, he

would pay the proper tax.

     On October 18, 1995, respondent sent petitioner and Ms.

Duncan a notice that determined a deficiency in Federal income

tax for 1992 in the amount of $6,958 and an accuracy-related

penalty under section 6662(a) in the amount of $882.    The

deficiency and penalty were based upon an increase in

petitioner's adjusted gross income, as well as a resulting

computational adjustment to claimed medical expenses.    Petitioner

and Ms. Duncan did not file a petition with this Court seeking a

redetermination of the deficiency and penalty.   Thus, on March

18, 1996, respondent assessed the deficiency in income tax and

interest due in the amounts of $6,958 and $1,064, respectively.

The penalty under section 6662(a) was not assessed.    Additional
                              - 5 -
interest in the amount of $67.36 was assessed on September 30,

1996.

     On November 13, 1996, petitioner filed a claim with

respondent requesting the abatement of interest on the ground

that his employer had failed to provide him with a correct wage

statement.   On January 29, 1997, respondent issued a notice of

final determination denying petitioner's request for abatement on

the ground that an officer or employee of the Internal Revenue

Service did not commit any errors or delays that merited the

abatement of interest.

     Section 6404(e)(1) provides, in pertinent part, that the

Commissioner may abate the assessment of interest on any

deficiency attributable to any error or delay by an officer or

employee of the IRS (acting in his official capacity) in

performing a ministerial act.3   For purposes of section

6404(e)(1), an error or delay is taken into account only (1) if

no significant aspect of such error or delay can be attributed to

the taxpayer, and (2) after the IRS has contacted the taxpayer in




3
     In 1996, sec. 6404(e) was amended under sec. 301 of the
Taxpayer Bill of Rights 2, Pub. L. 104-168, 110 Stat. 1452, 1457
(1996), to permit respondent to abate interest with respect to an
"unreasonable" error or delay resulting from "managerial" and
ministerial acts. The new provision applies to interest accruing
with respect to deficiencies or payments for tax years beginning
after July 30, 1996. The new provision is not applicable in this
case. See Woodral v. Commissioner, 112 T.C. 19, 25 n.8 (1999).
                              - 6 -
writing with respect to such deficiency or payment.    See sec. 6404(e)(1).

     The term "ministerial act" means 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 prerequisites to the act, such as conferences and review by

supervisors have taken place.    See sec. 301.6404-2T(b)(1),

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

1987).4

     For purposes of section 6404(e), an error or delay is taken

into account only after the IRS has contacted the taxpayer in

writing with respect to such deficiency or payment.    See sec.

6404(e)(1).    In this case, respondent did not contact petitioner

in writing until May 10, 1995.    No error or delay occurred after

this date.    In fact, petitioners received the notice of

deficiency approximately 5 months after respondent contacted them

regarding the unreported income.    Therefore, petitioner's

arguments that his employer failed to provide him with a proper

Form W-2 and that respondent provided him with misinformation are

unavailing.    These circumstances occurred before May 10, 1995.




4
     The final Treasury regulation under sec. 6404 was issued on
Dec. 18, 1998. The final regulation contains the same definition
of ministerial act as the temporary regulation. The final
regulation generally applies to interest accruing on deficiencies
or payments of tax described in sec. 6212(a) for tax years
beginning after July 30, 1996. See sec. 301.6404-2(b)(2),
Proced. & Admin. Regs.
                              - 7 -
     Petitioner's argument that the IRS failed to examine his

return promptly in light of the statement on the return is

without merit.   We have previously held that this Court is not at

liberty to modify a period of time prescribed by a statute of

limitations in which the Commissioner is authorized to act.    See

Foster v. Commissioner, 80 T.C. 34, 229 (1983), affd. in part and

vacated in part on another issue 756 F.2d 1430 (9th Cir. 1985);

Saigh v. Commissioner, 36 T.C. 395, 424-425 (1961).    Section 6501

expressly defines the period that respondent is authorized to

assess deficiencies against taxpayers.   Petitioners filed their

1992 Federal income tax return on April 15, 1993.     Respondent

issued the notice of deficiency on October 18, 1995.    Since the

latter date is within the 3 years of the former, the notice of

deficiency was timely under section 6501(a).   The timeliness of

respondent's examination is not an error for purposes of section

6404(e).5




5
     Sec. 6404(g) provides for a suspension of the imposition of
interest if the taxpayer timely files a return and the Secretary
fails to provide the taxpayer with notice of liability and a
basis for the liability before the close of the 1-year period
(18-month period in the case of taxable years beginning before
Jan. 1, 2004) beginning on the later of (1) the date on which the
return is filed; or (2) the due date of the return without regard
to extensions. See sec. 6404(g). Sec. 6404(g) was added to the
Code by sec. 3305(a) of the Internal Revenue Service
Restructuring and Reform Act of 1998, Pub. L. 105-206, 112 Stat.
685, 743 (1998). Sec. 6404(g) is effective for tax years ending
after July 22, 1998. Therefore, sec. 6404(g) does not apply to
this case.
                              - 8 -
     Based on the foregoing reasons, we hold that respondent did

not abuse his discretion when he denied petitioner's request for

abatement of interest on the deficiency in income tax for 1992.

     To reflect the foregoing,



                                        Decision will be entered

                                   for respondent.
