                        T.C. Memo. 2001-80



                      UNITED STATES TAX COURT



          ROBERT COCO AND LAUREEN COCO, Petitioners v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 9460-00.                        Filed April 2, 2001.


     Ronald J. Cohen, for petitioners.

     Robin L. Peacock, for respondent.



                        MEMORANDUM OPINION



     GERBER, 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
                                                   (continued...)
                               - 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:   This case is before

the Court on respondent’s Motion to Dismiss for Failure to State

a Claim Upon Which Relief Can be Granted filed pursuant to Rule

40.   Respondent asserts that petitioners failed to state a claim

in their amended petition seeking review of a denial of a request

for abatement under section 6404(e).   The amended petition was

filed with this Court pursuant to section 6404(i).    The premise

of the motion is that section 6404(e) does not provide authority

for respondent to abate interest assessed against petitioners for

tax year 1978.   Accordingly, respondent asserts that there is no

factual or legal basis for the Court to grant the requested

relief.

      Petitioners resided in Monroe, New York, at the time they

filed their petition.

Background

      Petitioners filed a petition with this Court in 1983 to

contest deficiencies for tax years 1978 and 1979 (docket No.

21670-83).   The parties filed a stipulation of settled issues in

that case, and an agreed decision was entered on June 15, 1985.



      1
      (...continued)
and Procedure.
                               - 3 -

The decision reflected that petitioners were liable for a

deficiency of $13,690 for 1978 and $10,209.07 for 1979.

     Petitioners contacted respondent during the latter part of

1985 and early part of 1986 to obtain a notice of assessment or

statement of tax due.   In March 1986, respondent apparently

indicated that he would notify petitioners as to the tax

liability due, and petitioners should await such notification.

Approximately 7 years later, respondent advised petitioners of

his intention to levy for the amounts due and owing for 1978 and

1979.   Petitioners paid the tax, interest, and penalty in October

1996.

     Petitioners filed a Claim for Refund and Request for

Abatement (Form 843).   On November 27, 1998, respondent sent a

letter to petitioners in which respondent approved an abatement

of interest of $26,275.65 for tax year 1979.   The letter stated

that an abatement for tax year 1979 was justified because

respondent delayed in notifying petitioners of the 1978 and 1979

tax liabilities between February 27, 1986, and February 8, 1993.

The letter further indicated that interest could not be abated

for the tax year 1978 because “I.R.C. 6064(e)(1) empowers I.R.S.

to abate interest for tax years after 1978.    Therefore, tax year

1978 is excluded from any actions.”

     On March 2, 2000, respondent mailed to petitioners a Final

Determination disallowing petitioners claim for abatement of
                                - 4 -

interest under section 6404(e)(1) for the tax year 1978.

Respondent noted that section 6404(e)(1) “authorizes interest

abatement only for tax years beginning after 1978”.

     Petitioners filed a timely petition and amended petition for

review of respondent’s denial of their request for abatement of

interest.    In their amended petition, petitioners allege that

respondent should have abated interest because of respondent’s 7-

year delay in providing petitioners with a notice of assessment

or statement of tax for 1978.

     Respondent filed the instant motion,2 asserting that the

abatement of interest for tax year 1978 was properly denied on

the ground that respondent lacks the authority to abate interest

for the tax year 1978.

     Petitioners filed an opposition to respondent’s motion.

Petitioners contend that this Court has absolute authority to

consider any refusal of abatement of interest under section

6404(e).    Further, petitioners argue that Congress did not intend

to deny a taxpayer the opportunity for an abatement of interest

for taxable years ending before January 1, 1979.

Discussion

     Rule 40 provides that a party may file a motion to dismiss

for failure to state a claim upon which relief can be granted.



     2
          The Court granted leave to file respondent’s Motion to
Dismiss for Failure to State a Claim.
                               - 5 -

Generally, we may dismiss a petition for failure to state a claim

upon respondent’s motion when it appears beyond doubt that

petitioners can prove no set of facts in support of their claim

which would entitle them to relief.    See Conley v. Gibson, 355

U.S. 41, 45-46 (1957); Price v. Moody, 677 F.2d 676, 677 (8th

Cir. 1982); Boyce v. Commissioner, T.C. Memo. 1996-439, affd. 122

F.3d 1069 (9th Cir. 1997); Arredondo v. Commissioner, T.C. Memo.

1996-185.

     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.    The Tax Court has

jurisdiction to review whether the Commissioner’s refusal to

abate interest was an abuse of discretion.    See sec. 6404(i)(1).

     Petitioners’ request for abatement of interest is based upon

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

Commissioner may abate interest attributable to unreasonable

error or delay by an officer or employee of the Internal Revenue

Service in performing a ministerial act.3    Section 6404(e) was


     3
          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
                                                   (continued...)
                                - 6 -

enacted under the Tax Reform Act of 1986 (TRA 1986), Pub. L. 99-

514, sec. 1563(a), 100 Stat. 2762, and applies to interest

accruing with respect to deficiencies or payments for tax years

beginning after December 31, 1978.      See TRA 1986 sec. 1563(b),

100 Stat. 2762.

     Petitioners argue that Congress did not intend to deny

abatement of interest applications for taxable years prior to

1979.    To the contrary, the statutory history of section 6404(e)

is clear that the Commissioner does not have the authority to

grant a request for abatement of interest under section 6404(e)

for tax years ending prior to 1979.      This Court, as well as

several other courts, has held that section 6404(e) applies only

to taxable years beginning after December 31, 1978.      See Magnone

v. United States, 902 F.2d 192 (2d Cir. 1990); Goettee v.

Commissioner, T.C. Memo. 1997-454; Mounts v. United States, 76

AFTR 2d 5608, 95-2 USTC par. 50399 (S.D. W.Va. 1995); McMullen v.

United States, 21 Cl. Ct. 248, 250 (1990).      Respondent did not

have the authority to grant a request for abatement made pursuant

to section 6404(e) for the taxable year 1978, and, accordingly,

respondent did not abuse his discretion in denying the request

for abatement.



     3
      (...continued)
July 30, 1996. Therefore, the amendment is inapplicable to the
instant case. See Woodral v. Commissioner, 112 T.C. 19, 25 n.8
(1999).
                                 - 7 -

Conclusion

     For the reasons set forth above, we hold that petitioners

have failed to state a claim for which relief can be granted, and

we shall grant respondent’s motion.       In so holding, we have

carefully considered remaining arguments made by petitioners for

a result contrary to that expressed herein, and, to the extent

not discussed above, we consider those arguments to be without

merit.

     To reflect the foregoing,



                                              An appropriate order and

                                         decision will be entered.
