                        T.C. Memo. 2003-238



                      UNITED STATES TAX COURT



    LAWRENCE S. AHMAOGAK AND MYRNA AHMAOGAK, Petitioners v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 10850-01.           Filed August 11, 2003.



     Mason D. Morisset, for petitioners.

     Lisa M. Oshiro, for respondent.


                        MEMORANDUM OPINION


     DAWSON, Judge:   This case was assigned to Special Trial

Judge Lewis R. Carluzzo pursuant to section 7443A(b)(5) 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.


     1
        Unless otherwise indicated, section references are to the
Internal Revenue Code of 1986, as amended. Rule references are
to the Tax Court Rules of Practice and Procedure.
                                - 2 -

                OPINION OF THE SPECIAL TRIAL JUDGE

     CARLUZZO, Special Trial Judge:     On February 28, 2001,

respondent issued a notice of final determination denying in

large part petitioners’ request to abate interest on their

Federal income tax liabilities for 1986 through 1989, inclusive,

and 1991 (the underlying years).    In response to that notice,

petitioners timely petitioned this Court to review respondent’s

denial.   Our jurisdiction is established by section 6404(h).2

The issue for decision is whether respondent’s failure to abate

interest on petitioners’ Federal income tax liabilities for the

underlying years is an abuse of discretion.

                              Background

     Petitioners resided in Barrow, Alaska, at the time the

petition was filed.   The facts in this case, all of which have

been stipulated, are summarized below.

     Petitioners are husband and wife.     They filed timely joint

Federal income tax returns for 1987, 1988, and 1989, but untimely

returns for 1986 and 1991.3




     2
        Sec. 6404(h) was previously designated sec. 6404(i). See
Victims of Terrorism Tax Relief Act of 2001, Pub. L. 107-134,
sec. 112(d)(1)(B), 115 Stat. 2435.
     3
        The returns have not been included in the record.
Details of the returns are set forth in a document prepared by
respondent’s Appeals officer in response to petitioners’
administrative claim for interest abatement. The parties
stipulated the truth of the factual portions of this document.
                                - 3 -

     For convenience, only some of the details of the assessment

process for the underlying years are set forth in the body of

this opinion; additional details are contained in the Appendix.

     By letter dated September 12, 1988, respondent notified

petitioners that their 1986 return was under examination.     That

return was selected for examination because of deductions claimed

for the donation of whale meat and whaling expenses.    The initial

interview with the petitioners took place on October 20, 1988.

On or around November 1, 1988, the examination was extended to

include petitioners’ 1987 return, on which similar deductions

were claimed.    An examination report proposing to disallow the

above-referenced deductions (presumably for both years) was

mailed to petitioners on February 8, 1989.    Petitioners’ protest

was received on July 3, 1989, and an Appeals officer was assigned

2 weeks later.    On August 1, 1989, the Appeals officer scheduled

a conference with petitioners’ representative.    During Appeals

consideration, much correspondence was exchanged, and several

conferences took place.    On June 14, 1991, respondent’s Appeals

Office issued a notice of deficiency to petitioners in which

deficiencies in their 1986 and 1987 income taxes were determined.

Petitioners timely petitioned this Court in response to that

notice on September 16, 1991 (docket No. 20784-91).    That

docketed case was set for trial but was continued several times.

Ultimately, a stipulated decision was entered on February 29,
                               - 4 -

2000, and the deficiencies, an addition to tax, and interest were

assessed on May 29, 2000.

     The examination, Appeals consideration, and litigation

phases for the years 1988, 1989, and 1991 progressed in a manner

similar to that for the years 1986 and 1987.   For each of these

later years, deductions similar to the those claimed and

disallowed for 1986 and 1987 were also claimed and disallowed.

However, by the time the examination of 1991 was completed,

petitioners had decided to forgo Appeals consideration and

proceed with a test case before this Court.

     As of July 28, 1994, petitioners had three cases docketed in

this Court (the docketed cases).4   The docketed cases were

consolidated with other cases involving similarly situated

taxpayers.   At petitioners’ request, the docketed cases were held

in suspense to allow for the enactment of proposed Federal

legislation that specifically addressed the types of deductions

in dispute in those cases.   Although the proposed legislation was

never enacted, petitioners and respondent agreed to a settlement

in each of the docketed cases, the terms of which are consistent

with the relief contemplated by the proposed legislation.




     4
        Docket No. 20784-91, filed Sept. 16, 1991, involving 1986
and 1987; docket No. 23983-92, filed Oct. 27, 1992, involving
1988 and 1989; and docket No. 13503-94, filed July 28, 1994,
involving 1991.
                                - 5 -

     On May 29, 2000, consistent with the stipulated decision

document entered in each of the docketed cases, deficiencies,

additions to tax, and interest in the following amounts were

assessed:

     Year        Deficiency     Sec. 6651(a)       Interest

     1986        $ 7,253.00       $147.80         $16,578.00

     1987         23,488.00             —          45,545.88

     1988         14,044.00             —          22,934.40

     1989          5,753.00             —           7,776.27

     1991          3,001.12        718.57           3,382.33


     On June 27, 2000, respondent received from petitioners a

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

for each of the underlying years (the abatement claims).      Block 5

of the abatement claims is designated “Explanation and additional

claims.”    Instructions following the designation direct the

taxpayer to “Explain why * * * this claim should be allowed, and

show computation of tax refund or abatement of interest, penalty,

or addition to tax.”    In the space below these instructions on

each of the abatement claims, petitioners inserted the following:

     Our 1986 [1987, 1988, 1989, or 1991, as appropriate]
     return was audited, brought to the Appeals Office, and
     in Tax Court. We have a good faith belief that delays
     occurred in preforming [sic] ministerial acts by an
     officer or employee of the Internal Revenue Service
     during that period * * *. The occurance [sic] of such
     delays requires the abatement of the assessment of
     interest for those particular periods. Furthermore,
     throughout much of this period legislation was pending
                                 - 6 -

     which would have substantially affected the treatment
     of specific deductions. Accordingly, the Service
     postponed consideration of these matters. Further, a
     death in the family of our legal counsel resulted in an
     additional delay in consideration of our case. In
     light of the ministerial delays, and as well as our
     reliance on the actions of Congress, the failure to
     abate interest in our circumstances would constitute
     grossly unfair treatment and impose on us an undue
     hardship.

On the abatement claims, petitioners requested abatement of

interest as follows:

     Year               Period              Approximate Amount

     1986        02/02/1989 — 10/1999            $13,300

     1987        02/02/1989 — 10/1999             25,000

     1988        12/16/1991 — 10/1999             16,700

     1989        06/10/1991 — 10/1999             10,000

     1991        09/13/1993 — 10/1999              2,500

     By letter dated January 24, 2001, respondent notified

petitioner that for 1986 and 1987, $295.43 of interest that

accrued from June 8 to July 3, 1989, would be abated, but

otherwise denied each of petitioners’ requests for abatement of

interest.   The reason for the partial allowance has not been

provided.   By letter dated February 23, 2001, petitioners

requested that respondent’s Appeals Office reconsider the portion

of the abatement claims that had been denied.   On February 28,

2001, respondent issued a notice of final determination in which

respondent refused, with the exception previously noted, to abate
                                - 7 -

interest on petitioners’ Federal income tax liabilities for the

underlying years.

                            Discussion

     In general, interest on a Federal income tax liability

begins to accrue on the due date of the return and continues to

accrue, compounding daily, until payment is made.    Secs. 6601(a),

6622.

     The Commissioner has the authority to abate the assessment

of interest on a deficiency or payment of income tax if the

accrual of such interest is attributable to an error or delay by

an official or employee of the Internal Revenue Service in

performing a ministerial act.   Sec. 6404(e)(1).5   A ministerial

act means a procedural or mechanical act that does not involve

the exercise of judgment.   Lee v. Commissioner, 113 T.C. 145,

149-150 (1999); sec. 301.6404-2T, Temporary Proced. & Admin.

Regs., 52 Fed. Reg. 30163 (Aug. 13, 1987).   A prerequisite to the

relief contemplated by section 6404(e) is the “erroneous or

dilatory performance of a ministerial act” by the Commissioner’s




     5
        Sec. 6404(e) was amended by the Taxpayer Bill of Rights
2, Pub. L. 104-168, sec. 301, 110 Stat. 1457 (1996), to permit
the Commissioner to abate interest with respect to an
“unreasonable” error or delay resulting from “managerial” or
ministerial acts. The amendment is effective for interest
accruing with respect to deficiencies or payments for tax years
beginning after July 30, 1996, and is therefore inapplicable
here.
                              - 8 -

employee that results in the accrual of interest the taxpayer

seeks to have abated.

     In the abatement claims, petitioners state that they have a

good faith belief that delays occurred in preforming ministerial

acts, but they have failed to identify a single instance of

respondent’s dilatory performance of a ministerial act, and

respondent has not admitted to any.   Instead, petitioners offered

the following in their opening brief:

     While petitioners believed, and still believe, that a
     deduction was probably claimable under existing law,
     attempts were made to clarify the situation by
     requesting retroactive legislation in Congress. There
     was substantial interest in this legislation which made
     it through numerous committee layers at various times.
     However, the legislation failed to pass prior to this
     matter being finally set for trial. After careful
     reconsideration of the matter, the Respondent agreed
     that some charitable deductions were proper and the
     underlying tax liability was settled. However, due to
     the delay in waiting for legislation, a delay caused by
     an illness and death of a close family member of
     Petitioners’ counsel, and other factors as noted in the
     stipulated agreed facts, substantial interest was
     imposed.


     The above-quoted passage, as well as the statements

contained in the abatement claims, greatly undermines

petitioners’ claim to section 6404(e) relief.   We have reviewed

the examination history (including Appeals consideration and

litigation phases) of petitioners’ Federal income tax returns for

the underlying years as set forth in the Appeals officer’s

chronology of events and, with the exception of the duration of
                               - 9 -

the docketed cases, find nothing out of the ordinary in either

the sequence of events or the passage of time between events.

Moreover, petitioners acknowledge, as evidenced by the above-

quoted passages, that the length of time that the docketed cases

were pending is not attributable to the erroneous or dilatory

performance of a ministerial act by respondent’s employee.   See

Lee v. Commissioner, supra.

     Resolution of the docketed cases was obviously delayed to

allow for the enactment of the proposed legislation, and the

delay resulted in the imposition of interest.   We are not

unsympathetic to petitioners’ situation and the frustration that

must have followed their failed attempts to resolve their tax

disputes through legislation long promised but never enacted.

Nevertheless, under the circumstances, the additional interest

that accrued during the period of delay of the docketed cases is

not subject to abatement under section 6404(e).   Simply put, the

interest that accrued on petitioners’ Federal income tax

liabilities for the underlying years results from petitioners’

failure to pay their Federal income tax liability for each year

when due.   Section 6404(e) does not authorize the abatement of

interest upon that ground, and respondent’s refusal to do so is

not an abuse of discretion.   See Donovan v. Commissioner, T.C.

Memo. 2000-220; Douponce v. Commissioner, T.C. Memo. 1999-398.
                        - 10 -

To reflect the foregoing,

                                  Decision will be

                             entered for respondent.
                                          - 11 -

                                         APPENDIX


          EVENT                                     DATE OF EVENT
                              Docket No. 20784-91   Docket No. 23983-92   Docket No. 13503-94
                                1986       1987       1988       1989            1991
Filed Federal income tax
                              09/04/87    Timely     Timely     Timely         04/14/93
returns
Commenced examination         09/12/88   11/01/88   03/28/91   02/15/91        09/13/93
Initial interview             10/20/88   unknown    unknown    03/08/91         unknown
Prepared Report
Transmittal, Reviewed and     02/28/89   02/28/89   unknown    unknown          unknown
Approved for Appeals
Received petitioners'
Written Protest for an        07/03/89   07/03/89   02/11/92   02/11/92        08/01/94
Appeals Conference
Appeals officer assigned      07/18/89   07/18/89   unknown    unknown         09/29/94
Scheduled Appeals
                              08/01/89   08/01/89   03/04/92   03/04/92        09/30/94
conference
Held Appeals conference       10/31/89   10/31/89   04/28/92   04/28/92         unknown
Respondent mailed
                              04/10/91   04/10/91   unknown    unknown          unknown
settlement offer
Petitioners rejected
                              05/28/91   05/28/91   07/16/92   07/16/92         unknown
settlement offer
Issued Notice of Deficiency   06/14/91   06/14/91   07/30/92   07/30/92        04/29/94
Filed Petition                09/16/91   09/16/91   10/27/92   10/27/92        07/28/94
Petitioner filed status
report with Tax Court on      06/08/94   06/08/94   06/08/94   06/08/94        06/08/94
proposed legislation
Reconsidered settlement       06/13/94   06/13/94   06/13/94   06/13/94           n/a
Respondent filed status
report with Tax Court on      01/27/95   01/27/95   01/27/95   01/27/95        01/27/95
proposed legislation
Respondent filed second
status report with Tax
                              09/26/97   09/26/97   09/26/97   09/26/97        09/26/97
Court on proposed
legislation
Petitioner filed second
status report with Tax
                              12/02/98   12/02/98   12/02/98   12/02/98        12/02/98
Court on proposed
legislation
Settlement conference with
                              09/02/99   09/02/99   09/02/99   09/02/99        09/02/99
Appeals
Stipulated decision entered
                              02/29/00   02/29/00   02/29/00   02/29/00        02/29/00
by Tax Court
Assessment of tax,
                              05/29/00   05/29/00   05/29/00   05/29/00        05/29/00
penalties, and interest
