                         T.C. Memo. 2004-254



                       UNITED STATES TAX COURT



             ROBERT LEE McELROY, JR., Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 7440-02.                Filed November 8, 2004.


     Robert L. McElroy, Jr., pro se.

     Natasha V. Chevalier, for respondent.



                         MEMORANDUM OPINION


     VASQUEZ, Judge:    On October 18, 2001, respondent issued a

notice of final determination disallowing petitioner’s claim for

an abatement of interest on income tax liabilities for 1995.   The

sole issue for decision is whether respondent abused his

discretion in failing to abate the assessment of interest.
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Background

     The parties submitted this case fully stipulated.      The

stipulation of facts and the attached exhibits are incorporated

herein by this reference.   Petitioner resided in Flower Mound,

Texas, at the time he filed his petition.

     In February of 1995, petitioner withdrew $33,614.75 from his

qualified retirement savings plan.      Petitioner reported the

withdrawal on his 1995 Federal income tax return but did not

report the 10-percent additional tax imposed by section 72(t)1

for an early distribution from a qualified retirement plan.

     Respondent determined a deficiency of $1,643 in petitioner’s

1995 Federal income tax.    In Robert L. McElroy, Jr. v.

Commissioner, T.C. Summary Opinion 2000-150, we held petitioner

liable for the 10-percent additional tax.      Therein, petitioner

also argued that he should not be required to pay interest on the

deficiency.   We held that we did not have jurisdiction over the

interest that accrued on petitioner’s deficiency because the

deficiency had not been assessed.

     On December 19, 2000, respondent received a payment of

$1,643 from petitioner for his 1995 tax liability and a letter

contesting the related interest liability.      Respondent treated

the letter as a request for interest abatement and denied the



     1
        Unless otherwise indicated, all section references are to
the Internal Revenue Code.
                                - 3 -

request.   Petitioner owed $813.40 in accrued interest and an

$8.21 penalty for failure to pay the interest when demanded, and

respondent offset $821.61 of petitioner’s 2000 tax refund to

satisfy this liability.

Discussion

     If the Commissioner abuses his discretion in failing to

abate interest under section 6404, this Court may order an

abatement.   Sec. 6404(h)(1).   In order to prevail, a taxpayer

must prove that the Commissioner exercised this discretion

arbitrarily, capriciously, or without sound basis in fact or law.

Woodral v. Commissioner, 112 T.C. 19, 23 (1999).    On brief,

petitioner states that respondent did not notify him of the

section 72(t) additional tax until 2-1/2 years after his 1995

Federal income tax return was filed.    Accordingly, petitioner

appears to rely upon section 6404(e)(1) and (g)(1).

     Under preamendment section 6404(e),2 the Commissioner “may

abate the assessment of interest on any payment of tax to the

extent that any error or delay in payment is attributable to an



     2
       In 1996, sec. 6404(e) was amended under sec. 301 of the
Taxpayer Bill of Rights 2, Pub. L. 104-168, 110 Stat. 1457
(1996), to permit the Secretary to abate interest with respect to
an “unreasonable” error or delay resulting from “managerial” and
ministerial acts. This amendment, however, applies to interest
accruing with respect to deficiencies or payments for tax years
beginning after July 30, 1996; therefore, the amendment is
inapplicable to the case at bar. See Woodral v. Commissioner,
112 T.C. 19, 25 n.8 (1999).
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officer or employee of the IRS being erroneous or dilatory in

performing a ministerial act.”     Lee v. Commissioner, 113 T.C.

145, 148 (1999).    Petitioner has not alleged a ministerial error

or delay within the meaning of section 6404(e).       Furthermore, the

evidence does not establish that respondent committed a

ministerial error or delay requiring an abatement of interest.

     Section 6404(g) is effective only for tax years ending after

July 22, 1998.     Nerad v. Commissioner, T.C. Memo. 1999-376.

Consequently, section 6404(g)(1) is inapplicable because

petitioner is seeking an abatement of interest on his income tax

liability for the taxable year 1995.

     In reaching our holdings herein, we have considered all of

petitioner’s arguments, and, to the extent not mentioned above,

we find them to be irrelevant or without merit.

     To reflect the foregoing,


                                              Decision will be entered

                                         for respondent.
