                  T.C. Memo. 1998-363



                UNITED STATES TAX COURT



        DAI HO AND YOUNG H. CHO, Petitioners v.
      COMMISSIONER OF INTERNAL REVENUE, Respondent



Docket No. 3188-98.                     Filed October 7, 1998.


     Ps filed a claim (Form 843) with R in May 1997 seeking
an abatement of interest for the taxable year 1992. Having
received no response from R, Ps filed a petition with the
Court in February 1998 seeking a review of the request for
abatement pursuant to sec. 6404(g), I.R.C. R filed a motion
to dismiss for lack of jurisdiction on the basis that no
notice of final determination had been issued under sec.
6404(g) which would form the basis for jurisdiction.

     Held: There is nothing in sec. 6404(g) or the
legislative history of this provision (in contrast to sec.
6532(a)), which imposes a time limit within which the
Secretary must act or permits the filing of a petition with
this Court, where the Secretary fails to act. Held,
further, in the absence of a final determination denying
petitioners' request for abatement of interest, the Court
lacks jurisdiction to proceed under sec. 6404(g).


Mark Kotlarsky, for petitioners.
                                 - 2 -


     Barbara B. Franklin, for respondent.


                        MEMORANDUM OPINION

     COHEN, Chief Judge:     This case was assigned to Chief Special

Trial Judge Peter J. Panuthos, pursuant to the provisions of

section 7443A(b)(4) and Rules 180, 181, and 183.1     The Court

agrees with and adopts the opinion of the Special Trial Judge,

which is set forth below.

                OPINION OF THE SPECIAL TRIAL JUDGE

     PANUTHOS, Chief Special Trial Judge:     This matter is before

the Court on respondent's Motion to Dismiss for Lack of

Jurisdiction.   Respondent contends that the Court lacks

jurisdiction under section 6404(g) to consider the petition filed

in this case.   As explained in greater detail below, we will

grant respondent's motion.

Background

     On or about May 28, 1997, petitioners filed with respondent

a Form 843, Claim for Refund and Request for Abatement,

requesting that respondent abate interest for the taxable year

1992 in excess of $172,000.    On November 26, 1997, after several

months passed with no response from respondent, petitioners wrote

to Nancy Givens (Ms. Givens) at respondent's Problems Resolution


     1
        Section references are to the Internal Revenue Code, as
amended. Rule references are to the Tax Court Rules of Practice
and Procedure.
                                     - 3 -


Office in Richmond, Virginia, requesting that Ms. Givens locate

their Form 843 and provide petitioners with a response to their

request for abatement.   Petitioners were informed that they would

receive a response from the Problems Resolution Office in 4 to 6

weeks.

     On February 20, 1998, after receiving no response from the

Problems Resolution Office, petitioners filed a petition with the

Court seeking to invoke the Court's jurisdiction to review

respondent's denial of their request for abatement of interest

pursuant to section 6404(g).

     On March 9, 1998, petitioners received a handwritten letter

from Ms. Givens, along with a Letter 569(DO) issued by the

District Director in Richmond, Virginia.          Ms. Givens' handwritten

note, which includes an apology for her delayed response, states

that, although petitioners' request for abatement of interest was

being disallowed as set forth in the Letter 569(DO), respondent

did correct a computational error in the amount of $2,331.94 for

which petitioners would receive a refund in 4 to 5 weeks.         The

Letter 569(DO) states in pertinent part:

     We have examined your claim and propose the following:

                         *   *   *    *   *   *   *

     Full disallowance, as shown in the enclosed examination
     report or on the back of this letter. If you accept
     our findings, please sign and return the enclosed Forms
     2297 and 3363.

                         *   *   *    *   *   *   *
                               - 4 -


          If you do not accept our findings, we recommend
     that you request a conference with our Appeals Office.

The Letter 569(DO) further states that a review of petitioners'

file indicates that there was no delay due to a ministerial act

of an Internal Revenue Service employee that would allow for an

abatement of interest pursuant to section 6404(e).

     On May 26, 1998, respondent filed a motion to dismiss this

case for lack of jurisdiction on the ground that, at the time

that the petition was filed, respondent had not made a final

determination to deny petitioners' request for abatement of

interest.   Petitioners in turn filed an opposition to

respondent's motion to dismiss asserting that the Court should

exercise its jurisdiction in this case under section 6404(g) on

the ground that respondent unreasonably delayed providing

petitioners with a response to their request for abatement of

interest.   Relying on a similar procedure established with

respect to refund claims under section 6532(a), petitioners

contend that, where respondent does not respond to a request for

abatement of interest within 6 months of the filing of such

request, the Court should treat respondent's inaction as a final

determination to deny the request for purposes of the Court's

jurisdiction under section 6404(g).

     This matter was called for hearing at the Court's motions

session in Washington, D.C.   Counsel for both parties appeared at

the hearing and presented argument with respect to the pending
                               - 5 -


motion.   During the hearing, counsel for petitioners submitted to

the Court as an exhibit a letter that petitioners had recently

received from Appeals Officer Samuel E. Fish assigned to

respondent's Baltimore Appeals Office.   The letter, dated August

20, 1998, states that petitioners' request for abatement of

interest had been transferred from the Richmond Appeals Office to

the Baltimore Appeals Office to ensure impartiality in the review

process insofar as the Richmond Appeals Office may have

contributed to alleged delays giving rise to petitioners' request

for abatement of interest.   The letter further states that,

although there is no basis for granting petitioners' request for

abatement of interest, petitioners cannot invoke the Court's

jurisdiction to review the matter until respondent issues a final

determination letter denying petitioners' request.

     At the hearing, respondent informed the Court that a final

determination letter would be issued to petitioners at some time

in the near future depending upon the result of an appeals

conference with petitioners.

Discussion

     The question presented is whether the Court has jurisdiction

pursuant to section 6404(g) to review the Commissioner's failure

to grant petitioners' request for abatement of interest for 1992.

The Tax Court is a court of limited jurisdiction, and we may
                                - 6 -


exercise our jurisdiction only to the extent authorized by

Congress.   Naftel v. Commissioner, 85 T.C. 527, 529 (1985).

     Section 6404(g), enacted as section 302(a) of the Taxpayer

Bill of Rights 2 (TBOR 2), Pub. L. 104-168, 110 Stat. 1457

(1996),2 provides in pertinent part as follows:

            (g) Review of Denial 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.

In sum, the Court is vested with jurisdiction to review the

Commissioner's denial of a taxpayer's request for abatement of

interest if the taxpayer files a petition with the Court within

180 days after the date that the Commissioner mails to the

taxpayer a valid final determination not to abate interest.     Sec.

6404(g)(1); Rule 280(b); Banat v. Commissioner, 109 T.C. 92, 95

(1997).

     Section 302(b) of TBOR 2, 110 Stat. 1458, provides that

section 6404(g) applies "to requests for abatement after the date



     2
        Sec. 6404(g) subsequently was redesignated sec. 6404(i)
under the Internal Revenue Service Restructuring and Reform Act
of 1998, Pub. L. 105-206, secs. 3305(a) and 3309(a), 112 Stat.
743, 745, effective with respect to tax years beginning after
Dec. 31, 1997.
                                 - 7 -


of the enactment of this Act."    TBOR 2 was enacted on July 30,

1996.

     The legislative history underlying section 6404(g), which is

contained in H. Rept. 104-506, at 28 (1996), 1996-3 C.B. 49, 76,

states:

               Present law

          Federal courts generally do not have the
     jurisdiction to review the IRS's failure to abate
     interest.

               Reasons for change

          The Committee believes that it is appropriate for
     the Tax Court to have jurisdiction to review IRS's
     failure to abate interest with respect to certain
     taxpayers.

               Explanation of provision

          The bill grants the Tax Court jurisdiction to
     determine whether the IRS's failure to abate interest
     for an eligible taxpayer was an abuse of discretion.
     The Tax Court may order an abatement of interest. The
     action must be brought within 180 days after the date
     of mailing of the Secretary's final determination not
     to abate interest. An eligible taxpayer must meet the
     net worth and size requirements imposed with respect to
     awards of attorney's fees. No inference is intended as
     to whether under present law any court has jurisdiction
     to review IRS's failure to abate interest.

               Effective date

          The provision applies to requests for abatement
     after the date of enactment.

     Respondent maintains that we lack jurisdiction under section

6404(g) to consider the petition filed in this case on the ground

that respondent has not issued a final determination letter to
                                - 8 -


petitioners.    Petitioners counter that respondent should be

required to grant or deny a request for abatement of interest

within a reasonable amount of time and that respondent's failure

to act in this case should be treated as the equivalent of a

denial of petitioners' request for abatement of interest.

     In Bourekis v. Commissioner, 110 T.C. 20 (1998), the

taxpayers filed a petition with the Court in which they attempted

to invoke the Court's jurisdiction under section 6404(g) based on

the assertion that the Court should treat a notice of deficiency

issued to the taxpayers as the Commissioner's final determination

letter under section 6404(g).    The Commissioner moved to dismiss

and to strike the petition for lack of jurisdiction insofar as

the petition referred to the Court's jurisdiction under section

6404(g).    In granting the Commissioner's motion to dismiss, we

first noted that the Commissioner's final determination letter

under section 6404(g) "is a prerequisite to the Court's

jurisdiction and serves as a taxpayer's 'ticket' to the Tax

Court."    Bourekis v. Commissioner, supra at 26; see Kraft v.

Commissioner, T.C. Memo. 1997-476.      Further, relying on the body

of judicial opinions holding that, for a document to qualify as a

valid notice of deficiency under section 6213(a), the

Commissioner must intend for the letter to constitute a notice of

deficiency, we held that the Commissioner likewise must intend

for a letter to constitute a notice of final determination under
                               - 9 -


section 6404(g).   Bourekis v. Commissioner, supra at 26.   Because

the Commissioner did not intend for the notice of deficiency

issued to the taxpayers in Bourekis to be considered a final

determination letter under section 6404(g), we granted

respondent's motion to dismiss for lack of jurisdiction and to

strike.

     Consistent with Bourekis v. Commissioner, supra, we are

obliged to dismiss this case for lack of jurisdiction on the

ground that respondent has not issued a final determination

letter to petitioners within the meaning of section 6404(g).

Nevertheless, petitioners' contention that respondent should be

obliged to act within a reasonable amount of time with respect to

a request for abatement of interest merits further discussion.

     Although we stand by the basic proposition set forth in

Bourekis v. Commissioner, supra, that a notice of deficiency

under section 6213(a) and a final determination letter under

section 6404(g) share many important characteristics, there is an

important distinction between the two notices.   In particular,

under the scheme of sections 6201(e) and 6211-6213, and in the

absence of a waiver by the taxpayer pursuant to section 6213(d),

the Secretary generally must issue a notice of deficiency prior

to the assessment of a deficiency of income, estate, gift, and
                              - 10 -


certain excise taxes.3   After assessment, the Secretary may

proceed to collect assessed amounts, including interest, subject

to other provisions of the Internal Revenue Code.   Thus, in the

case of taxes which are subject to the deficiency procedures as

described in section 6211(a), the Secretary is motivated to issue

a notice of deficiency, since he is otherwise prohibited from

assessing and collecting a deficiency in tax.   In contrast,

section 6404(g) involves a situation where the Secretary has

previously assessed and possibly collected a tax, penalty, and

interest, and the taxpayer requests that the assessment for

interest be abated and that any overpayment be refunded.   In this

connection, a taxpayer's request for abatement of interest is

similar to a refund claim.   In fact, section 6404(g)(2)(B)

provides that rules similar to those of section 6512(b) (which

permit the Tax Court to order a refund of an overpayment and

interest) shall apply for purposes of section 6404(g).

     With this background, we return to petitioners' contention

that the Court should impose a 6-month deadline upon respondent

(similar to the 6-month rule imposed under section 6532 with

respect to claims for refund) within which respondent is obliged

to either grant or deny a taxpayer's request for abatement of


     3
        Sec. 6213(a) refers to secs. 6851, 6852 and 6861
(termination and jeopardy assessments) which are exceptions to
the normal deficiency procedures and not relevant to our
discussion herein.
                              - 11 -


interest.4    Petitioners' argument has a certain appeal,

guaranteeing a taxpayer the right of judicial review under

section 6404(g).   However, in contrast to section 6532(a),

Congress did not provide a remedy within section 6404(g) where

the Secretary fails to act on a request for abatement of interest

within a reasonable time.   Neither the plain language of section

6404(g) nor the legislative history suggests a basis for imposing

a time limit within which the Secretary is obliged to act with

respect to a request for abatement of interest.    Because the

Court clearly lacks the authority to graft such a time limit onto

section 6404(g), petitioners' remedy lies with Congress, not with

this Court.

     Consistent with Bourekis v. Commissioner, supra, we will

grant respondent's motion to dismiss for lack of jurisdiction.

In short, in the absence of a final determination denying

petitioners' request for abatement of interest, the Court lacks

jurisdiction to proceed under section 6404(g).

     To reflect the foregoing,

                                     An order will be entered

                                 granting respondent's Motion

                                 to Dismiss for Lack of

                                 Jurisdiction.


     4
        Sec. 6532(a)(1) provides that no suit or proceeding under
sec. 7422(a) shall be begun before the expiration of 6 months
from the date of filing a claim unless the Secretary renders a
decision within that time, nor after the expiration of 2 years
from the mailing of the notice of disallowance.
