                        T.C. Memo. 2001-104



                      UNITED STATES TAX COURT



          ROBERT A. AND M. FAYE STRANG, Petitioners v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 8130-00.                        Filed May 1, 2001.


     Robert A. Strang and M. Faye Strang, pro se.

     Brandi Darwin, for respondent.



                        MEMORANDUM OPINION


     DAWSON, Judge:   This case was assigned to Chief Special

Trial Judge Peter J. Panuthos pursuant to the provisions of

section 7443A(b)(5) and Rules 180, 181, and 183.1   The Court



     1
          Unless otherwise 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.
                               - 2 -

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: On February 7, 2000,

respondent issued a notice of final determination denying

petitioners’ request for an abatement of interest under section

6404(e)(1) for their 1993, 1994, and 1995 tax years.    The issue

for decision is whether respondent abused his discretion in

failing to abate the assessment of interest.

Background

     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.    All references to

petitioner are to Robert A. Strang.    At the time this petition

was filed, petitioners resided in Punta Gorda, Florida.

     Petitioner is a certified public accountant.    On December

21, 1995, respondent began an examination of Sunshine Travel

Agency, Inc.’s (Sunshine) corporate tax returns for a period

unspecified in the record.   Sunshine is wholly owned by

petitioners.   On January 18, 1996, Internal Revenue Service (IRS)

Agent Karen Garner held her first meeting with petitioner.    Agent

Garner expanded her examination to include petitioners’ 1993 and

1994 individual income tax returns on January 23, 1996.    Between

March 1996 and June 1997, Agent Garner spent at least 48 days
                                 - 3 -

reviewing the relevant returns.    In early 1997, Agent Garner

included petitioners’ 1995 income tax return in the examination.

Respondent issued a 30-day letter to petitioners on June 10,

1997, for the taxable years 1993, 1994, and 1995, and Agent

Garner held a closing conference with petitioner on the same day.

Agent Garner closed the case on July 28, 1997, after receiving a

protest letter from petitioners.

     Petitioners’ case was assigned to IRS Appeals Officer Roger

Allen on August 28, 1997.   Officer Allen met with petitioner on

December 9, 1997, but he did not work on petitioners’ case

between January 9, 1998, and June 9, 1998, because of his

caseload and other priorities.    Officer Allen received

petitioners’ offer of settlement on July 6, 1998, and respondent

received an executed settlement agreement from petitioners on

October 16, 1998.   Tax and interest were assessed on November 12,

1998, pursuant to the agreement.

     Petitioners submitted a Claim for Refund and Request for

Abatement (Form 843) on February 10, 1999, for tax years 1993,

1994, and 1995.   On February 7, 2000, respondent mailed to

petitioners a final determination disallowing petitioners’ claim

for abatement of interest under section 6404(e)(1).    Respondent

stated therein that he “did not find any errors or delays that

merit abatement of interest”.
                                - 4 -

     Petitioners filed a timely petition for review of

respondent’s denial of their request for abatement of interest.

The following is the centerpiece of petitioners’ argument:     “From

my experience the average amount of time required for an audit is

from three to six months after the agent has started the case.”

Since the examination process took more than 6 months,

petitioners assert that respondent unduly delayed the process.

     Respondent contends that he did not abuse his discretion in

denying petitioners’ request.   Further, respondent argues that

petitioners have not established that there was an error or delay

as a result of a ministerial act.

Discussion

      Section 6404(g) (redesignated as subsection 6404(i)),

enacted by section 302(a) of the Taxpayer Bill of Rights 2

(TBOR2), Pub. L. 104-168, 110 Stat. 1457 (1996), provides the Tax

Court with authority to review the Commissioner’s denial of a

taxpayer’s request for abatement of interest.    This Court may

order an abatement where the Commissioner’s failure to abate

interest was an abuse of discretion.    See sec. 6404(g).   The

taxpayer must demonstrate that the Commissioner, in failing to

abate interest, exercised his discretion arbitrarily,

capriciously, or without sound basis in law or fact.    See Krugman

v. Commissioner, 112 T.C. 230, 239 (1999); Woodral v.

Commissioner, 112 T.C. 19, 23 (1999).
                               - 5 -

     Petitioners’ request for abatement of interest is based upon

section 6404(e)(1).   Section 6404(e)(1) provides that the

Commissioner may abate interest on any payment of tax to the

extent that any delay in payment is attributable to unreasonable

error or delay by an officer or employee of the IRS in performing

a ministerial act.2   The term “ministerial act” is defined as “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.”    Sec.

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

30163 (Aug. 13, 1987).3

     Congress intended for the Commissioner to abate interest

“where failure to abate interest would be widely perceived as

grossly unfair.”   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.


     2
          In 1996, sec. 6404(e) was amended under sec. 301 of
TBOR2, Pub. L. 104-168, 110 Stat. 1457 (1996), to permit the
Commissioner 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
instant case. See Woodral v. Commissioner, 112 T.C. 19, 25 n.8
(1999).
     3
          The final regulation under sec. 6404, as issued on Dec.
18, 1998, contains the same definition of ministerial act. The
final regulation generally applies to interest accruing on
deficiencies or payments of tax for taxable years beginning after
July 30, 1996. See sec. 301.6404-2(b)(2), Proced. & Admin. Regs.
                                  - 6 -

(Vol. 3) 1, 208.   Yet, Congress intended that abatement would be

used sparingly, and it did not intend that abatement “be used

routinely to avoid payment of interest.”        Id.

      Petitioners contend that respondent unduly delayed the

examination process because the examination took more than 6

months.   Petitioners failed to establish any incidence of error

or delay in performing ministerial acts that gave rise to any

assessment of interest.   Arguably, respondent delayed

petitioners’ case when Officer Allen set their case aside for 6

months to work on other cases.     However, the failure of an IRS

officer to work on a case due to other priorities is not a

ministerial act.   See Leffert v. Commissioner, T.C. Memo. 2001-

23.   We conclude that respondent’s failure to abate interest was

not an abuse of discretion.

      To reflect the foregoing,

                                               Decision will be entered

                                          for respondent.
