                          T.C. Memo. 2000-196



                        UNITED STATES TAX COURT



              MARJORIE CATHEY MILLER, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 9164-99.                          Filed June 29, 2000.


     Charles H Hammer, for petitioner.

     Gregory M. Hahn, for respondent.



                          MEMORANDUM OPINION

     COHEN, Judge:   On November 12, 1998, respondent issued a

notice of final determination denying petitioner’s claim for

abatement of interest.    Petitioner filed a petition under section

6404(i) and Rule 280.    The case is before the Court on

respondent’s motion for summary judgment.       The issue for decision

is whether respondent has the authority to abate interest on

employment taxes under section 6404(e)(1)(A).      Unless otherwise
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indicated, all section references are to the Internal Revenue

Code in effect for the years in issue, and all Rule references

are to the Tax Court Rules of Practice and Procedure.

                            Background

     At the time the petition in this case was filed, petitioner

resided in Deer Park, Washington.   During 1984, 1985, and 1986

(the taxable years in issue), Marjorie Cathey Miller (petitioner)

operated a beauty salon known as “About Face” and employed

several individuals.   Petitioner treated these individuals as

independent contractors for tax purposes and did not file

employment tax returns (Form 940, Employer’s Annual Federal

Unemployment Tax Return, and Form 941, Employee’s Quarterly

Federal Tax Return) or issue Forms W-2 for the taxable years in

issue.   In 1987, respondent initiated a tax examination of

petitioner’s 1984, 1985, and 1986 business activities and, at the

conclusion of this examination in August 1987, concluded that

petitioner should have treated the individuals as employees

rather than as independent contractors.

     On August 25, 1987, respondent prepared Form 4666, Summary

of Employment Tax Examination, indicating that the following

employment taxes and penalties were owed by petitioner:
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                                          Sec. 6651/
     Year      Form            Tax       6656 Penalty         Total

     1984      940     $   520.07        $   182.03       $   702.10
     1984      941       7,184.81          2,491.75         9,676.56
     1985      940         904.50            316.58         1,221.08
     1985      941       6,681.35          2,322.55         9,003.90
     1986      940         911.12            318.89         1,230.01
     1986      941       7,301.22          2,536.56         9,837.78
     Total             $23,503.07         $8,168.36       $31,671.43


     On December 12, 1988, petitioner signed two Forms 2504,

Agreement to Assessment and Colection of Additional Tax and

Acceptance of Overassessment–Excise or Employment Tax, agreeing

to the assessment and collection of the above tax liabilities.

The liabilities listed on the Forms 2504 totaled $31,671.43.            On

December 16, 1988, petitioner submitted a check to respondent in

the amount of $31,671.43, and respondent applied this payment to

the employment taxes, penalties, and interest due from petitioner

for failure to file employment tax returns, leaving the following

amounts owed by petitioner:

     Year       Form            Tax            Penalty         Total

     1985       940        $  904.50      $      316.58    $ 1,221.08
     1986       940           911.12             318.89      1,230.01
     1986       941         5,066.46           1,879.01      6,945.47
     1984-86    W-2                              900.00        900.00
     Total                 $6,882.08          $3,414.48    $10,296.56



     In 1993, petitioner was contacted by respondent, who claimed

that petitioner had unpaid liabilities flowing from the 1987

examination.   After extensive discussions with respondent,
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petitioner was informed that, to pursue the matter further, she

had to pay the balance due and submit a claim for refund on Form

843, Claim for Refund and Request for Abatement.   On or about

May 16, 1994, petitioner submitted a check to respondent for

$21,706.47, paying the full amount of tax, penalty, and interest

owing on the unpaid employment tax liabilities.

     On May 15, 1996, petitioner submitted eight separate Forms

843 seeking abatement of interest assessed on the employment tax

liabilities.   On November 12, 1998, respondent mailed to

petitioner a final determination denying petitioner’s claim for

interest abatement.   Petitioner filed a petition to contest

respondent’s determination not to abate interest under section

6404(e)(1) for the taxable years in issue, claiming that

respondent’s denial was an abuse of discretion.

                            Discussion

     Respondent argues that there was no abuse of discretion

under section 6404(e) because respondent is not authorized under

section 6404(e)(1) to abate interest assessed with respect to

employment taxes.   Respondent relies on our holding in Woodral v.

Commissioner, 112 T.C. 19 (1999).   Petitioner argues that Woodral

was incorrectly decided, that respondent has the authority to

abate interest on employment taxes, and that respondent’s failure

to abate the interest in this case under section 6404(e)(1) was

an abuse of discretion.
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     Under Rule 121, a summary adjudication may be made “if the

pleadings, answers to interrogatories, depositions, admissions,

and any other acceptable materials, together with the affidavits,

if any, show that there is no genuine issue as to any material

fact and that a decision may be rendered as a matter of law.”

Rule 121(b).    No material facts are in dispute in this case;

thus, whether respondent has authority to abate interest on

employment taxes may be decided as a matter of law.

      Section 6404(e)(1) provides in pertinent part:

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

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

                  (B) any payment of any tax described in
             section 6212(a) to the extent that any
             unreasonable error or delay in such payment
             is attributable to such officer or employee
             being erroneous or dilatory in performing a
             ministerial or managerial act,

     the Secretary may abate the assessment of all or any
     part of such interest for any period. * * *

     In Woodral v. Commissioner, supra, this Court held that

respondent is authorized under section 6404(e) to abate interest

only on any “deficiency” or payment of tax relating to income,

estate, gift, generation skipping, or certain excise taxes.      See

id. at 25.    This Court stated:
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          Based on our review of section 6404(e) and the
     Code sections it references, we hold that the
     Commissioner lacks the authority to abate assessments
     of interest on employment taxes under section 6404(e).
     As the Commissioner has no authority to abate
     assessments of interest on employment taxes under
     section 6404(e), the Commissioner could not have
     committed an abuse of discretion--a person with no
     discretion simply cannot abuse it. [Id.]

Petitioner does not distinguish this case from Woodral.    Rather,

she asks us to overrule a recent decision of this Court.   We

decline to do so.

     Petitioner contends that Woodral “intermingled and combined

the wording of Subsection (A) and (B)” and “tampered with the

clear and unambiguous language” of section 6404(e)(1)(A) in

contravention of Exxon v. Commissioner, 102 T.C. 721 (1994).

“Courts are forbidden to tamper with the plain meaning of the

words employed unless they are clearly ambiguous or nonsensical.”

Id. at 727.   Petitioner also argues that section 6404 was enacted

to provide taxpayer relief and that there is absolutely no reason

to believe that Congress intended to limit section 6404(e)(1)(A)

as set forth in Woodral.

     As we stated in Woodral, if a statute is clear, we focus on

the language of the statute in determining congressional intent.

Particular phrases are construed in consideration of the overall

statutory scheme.   See Woodral v. Commissioner, supra at 22.

“Deficiency” is a term of art, and, according to section 6211,

deficiency does not deal with the realm of employment taxes.
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Thus, we must conclude that, in using the term “deficiency” in

section 6404(e)(1)(A), Congress intended only that respondent

have authority to abate interest with respect to income, estate,

gift, generation skipping, and certain excise taxes and not with

respect to employment taxes.   See sec. 6211.

     In this case, petitioner seeks to have interest relating to

employment tax liabilities abated under section 6404(e).

Following the precedent established in Woodral v. Commissioner,

supra, we conclude that respondent did not commit an abuse of

discretion in this case by denying petitioner’s claim for

abatement because respondent does not have the authority under

section 6404(e) to abate interest on employment taxes.       See

Woodral v. Commissioner, supra at 25.

     To reflect the foregoing,

                                              Respondent’s motion will

                                         be granted, and decision will

                                         be entered for respondent.
