                        T.C. Memo. 2007-374



                      UNITED STATES TAX COURT



              MARC AND SHERRI WARD, Petitioners v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 14688-06.              Filed December 26, 2007.



     Eugene A. Steger, Jr., for petitioners.

     Harry J. Negro, for respondent.


                        MEMORANDUM OPINION


     GALE, Judge:   This matter is before the Court on

respondent's motion to dismiss for lack of jurisdiction.1   In his

motion, respondent contends that no notice was issued to

petitioners upon which to form the basis for a petition to this


     1
       In addition, petitioners submitted a document to the Court
that was filed as a motion to restrain assessment or collection.
See discussion infra note 6.
                                - 2 -

Court.    Petitioners filed a response, and the Court conducted a

hearing on the matter.

                             Background

     At the time their petition was filed, petitioners resided in

Pennsylvania.

     Petitioners did not timely file returns for their 1994 or

1995 taxable year.    On June 29, 1999, subsequent to an

examination by respondent, petitioners signed a Form 870-AD,

Offer to Waive Restrictions on Assessment and Collection of Tax

Deficiency and to Accept Overassessment, agreeing to the

assessment and collection of deficiencies and section 6651(a)(1)

additions to tax for 1994 and 1995 "with interest as provided by

law".2    Respondent accepted petitioners' offer by countersigning

it on August 10, 1999.

     Petitioners received a notice of intent to levy concerning

their tax liabilities for 1994 and 1995 on or about July 27,

2001.    Petitioners did not request a hearing after receiving this

notice.

     On or about June 14, 2002, petitioners mailed a letter,

prepared by their attorney and signed by them,3 to respondent.


     2
       Unless otherwise indicated, all section references are to
the Internal Revenue Code of 1986 as amended, and all Rule
references are to the Tax Court Rules of Practice and Procedure.
     3
       The letter, dated June 12, 2002, was signed by
petitioners' attorney and petitioners. However, the handwritten
                                                   (continued...)
                                - 3 -

The letter contained the heading "Interest & Penalty Abatement

Request".    The letter was accompanied by a $22,000 check and

requested that respondent "apply the amount to tax principal

only" and accept the amount as "payment in full" of petitioners'

outstanding "tax principal" for taxable years 1994 and 1995.     The

letter further requested that all interest and penalties for 1994

and 1995 be abated due to "financial hardships".    The letter

alleged that petitioners had been unaware, when they signed the

consent to the assessment of their tax liabilities arising from

the examination of their 1994 and 1995 taxable years, that the

amounts consented to included penalties and would continue to

accrue interest until paid.    The letter concluded:   "We are

requesting abatement of the penalty and interest and the Service

accept the $22,000.00 as payment.    Please advise us of your

decision."

     Subsequent to sending the foregoing letter, petitioners

received a notice from respondent's Automated Collection System

dated December 23, 2004, that listed assessed balances, accrued

interest, and late payment penalties still owed with respect to

petitioners' 1994 and 1995 taxable years.




     3
      (...continued)
dates entered next to petitioners' signatures were both June 14,
2002.
                                - 4 -

     On March 31, 2005, approximately 33 months after

petitioners' letter was received by respondent,4 respondent sent

a Letter 853C to petitioners.   The letter was issued with respect

to petitioners' section 6651(a)(1) addition for 1995 and stated

that respondent could not grant petitioners' request to remove

the penalty because the information they provided did not

establish reasonable cause.   The letter made no reference to

petitioners' request for an abatement of either the section

6651(a)(1) addition for 1994 or interest for either year.

     On July 31, 2006, the Court received and filed a petition

submitted by petitioners and their counsel which they designated

as a petition for redetermination of a deficiency.   On the

petition, petitioners elected "small tax case" procedures.    On

the basis of the foregoing, this case was docketed initially as a

small tax case and designated as a petition for redetermination

of a deficiency.5



     4
       Respondent stipulated that he received the June 14, 2002
letter.
     5
       Upon further review of the petition, which is described in
its body as a "petition to remove penalties and interest"
determined by respondent for 1994 and 1995, and petitioners'
arguments at the hearing, it is apparent that the relief sought
by petitioners is an abatement of interest (and penalties). As
actions for review of the Commissioner's failure to abate
interest may not be conducted under the Court's small tax case
procedures, see sec. 7463, the small tax case designation has
been stricken by order of the Court. As this case is being
dismissed for lack of jurisdiction, the principal impact of this
change is to restore the parties’ right to appeal.
                                - 5 -

     Respondent thereafter filed a motion to dismiss for lack of

jurisdiction, to which petitioners filed an objection.

Petitioners subsequently submitted a document to the Court that

was filed as a motion to restrain assessment or collection.

Therein, petitioners contend that certain levies issued with

respect to petitioner Marc Ward were wrongful in light of the

pendency of this case.

                            Discussion

     Respondent maintains that we lack jurisdiction in this case

because no notice of deficiency or notice of final determination

not to abate interest with respect to taxable year 1994 or 1995

was issued to petitioners, nor was any other notice of

determination sufficient to confer jurisdiction on this Court

issued to them.

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

exercise our jurisdiction only to the extent authorized by

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

is undisputed that no notice of deficiency was ever issued to

petitioners for 1994 or 1995.    It is also undisputed that

petitioners failed to request a hearing pursuant to section

6330(b) after they received a notice of intent to levy with

respect to their tax liabilities for 1994 and 1995, and that no

notice of determination concerning a collection action was issued

to them concerning the levy.    Consequently, we have no
                                 - 6 -

jurisdiction over this case pursuant to section 6213 or

6330(d)(1).6

     Section 6404 authorizes the abatement of interest,

penalties, or additions to tax in limited circumstances.    Section

6404(e) authorizes the Commissioner to abate interest assessments

for taxable years beginning after December 31, 1978, that are

attributable to errors or delays by the Internal Revenue Service

(Service).     Section 6404(f) authorizes the Commissioner to abate

penalties or additions to tax that are attributable to erroneous

written advice by the Service.     Section 301.6404-1(c), Proced. &

Admin. Regs., provides that taxpayers shall make a request for

abatement on Form 843, Claim for Refund and Request for

Abatement.

     Section 6404(h), originally enacted by the Taxpayer Bill of

Rights 2, Pub. L. 104-168, sec. 302, 110 Stat. 1457 (1996), and

codified as section 6404(g), gives the Tax Court jurisdiction to

review the Commissioner's denial of certain taxpayers'7 requests




     6
       In the absence of jurisdiction under sec. 6213 or
6330(d)(1), it follows that the Court has no authority to act on
petitioners' motion to restrain assessment or collection, as
petitioners have identified no other exception to sec. 7421(a)'s
broad prohibition against suits to restrain assessment or
collection. Accordingly, petitioners' motion to restrain
assessment or collection will be denied.
     7
       To be eligible, taxpayers must meet the requirements
referred to in sec. 7430(c)(4)(A)(ii). Sec. 6404(h)(1).
                                - 7 -

for abatement of interest (but not penalties) if the taxpayer

files a petition with the Court within 180 days after the date a

final determination not to abate interest is mailed by the

Secretary.   Sec. 6404(h)(1); Banat v. Commissioner, 109 T.C. 92,

95 (1997).   The Commissioner's final determination letter "is a

prerequisite to the Court's jurisdiction and serves as a

taxpayer's 'ticket' to the Tax Court."    Bourekis v. Commissioner,

110 T.C. 20, 26 (1998); see Kraft v. Commissioner, T.C. Memo.

1997-476.

      Respondent argues that the Letter 853C issued to

petitioners denying their request for penalty relief with respect

to taxable year 1995 is not a final determination not to abate

interest.    No final determination was issued, respondent argues,

because petitioners never filed a proper request for interest

abatement; i.e., a Form 843, and because the reasons articulated

in petitioners' June 14, 2002 letter do not form a basis under

which respondent is authorized by section 6404(e) to abate

interest.

     Petitioners contend that their letter of June 12, 2002,

constituted a specific request that respondent abate both accrued

interest and penalties for taxable years 1994 and 1995.

Petitioners argue that respondent's failure to issue a final

determination with respect to petitioner's request for interest

abatement within a reasonable period of time after receipt of
                               - 8 -

that request is equivalent to a final determination not to abate

interest for purposes of section 6404(h).8   In the alternative,

petitioners argue that respondent's Letter 853C denying

petitioners' request for removal of a section 6651(a)(1) addition

for 1995 is sufficient to confer jurisdiction on this Court

because the letter's silence concerning interest abatement

constitutes a denial.

     To resolve our jurisdiction, we must determine whether

respondent has made a final determination not to abate interest

within the meaning of section 6404(h).   We note at the outset

that petitioners' June 2002 letter clearly and unequivocally

requested an abatement of interest with respect to petitioners'

1994 and 1995 income tax liabilities, although the request was

not made on a Form 843, as required in section 301.6404-1(c),

Proced. & Admin. Regs.   We find it unnecessary to decide whether

petitioners' letter was an adequate substitute for a Form 843,

however, because even assuming it was, a decision in respondent's

favor would still follow.

     Petitioners' first argument is that we should treat

respondent's failure to issue any response to their request for

interest abatement as a "final determination" for section 6404(h)

     8
       Petitioners further note that respondent's issuance of
demands for payments of interest subsequent to their request,
including the Automated Collection System notice of Dec. 23,
2004, demonstrates that respondent made a determination not to
abate interest.
                                    - 9 -

purposes, especially given respondent's subsequent written

demands for payment of the interest.         That argument, however, has

been considered and rejected by this Court.         See Cho v.

Commissioner, T.C. Memo. 1998-363.          In Cho we held that the Court

lacks authority to graft a time limit within which the

Commissioner is obliged to respond to a request for interest

abatement.    Id.   Thus, a failure to act on a request within a

reasonable time does not constitute a final determination for

section 6404(h) purposes.     Id.     Whether a remedy should be

provided in the case of the Commissioner's failure to act on an

interest abatement request is a decision for Congress rather than

this Court, we reasoned.     Id.

     Petitioners alternatively argue that we should consider

respondent's Letter 853C refusing to abate the 1995 late filing

penalty as a notice of final determination for section 6404(h)

purposes.    However, a letter must be intended as a notice of

final determination not to abate interest under section 6404 to

be treated as such for jurisdictional purposes.         See Bourekis v.

Commissioner, supra at 26.     As in Bourekis, the letter upon which

petitioners rely contains no indication that respondent intended

it as a notice of final determination or that respondent "[had]

given any consideration to whether it would be appropriate to

abate an assessment of interest" in petitioners' case.           Id.

Consistent with Bourekis, respondent's Letter 853C may not be
                             - 10 -

treated as a notice of final determination not to abate interest

under section 6404(h).

     Moreover, even if respondent's Letter 853C were treated as a

notice of final determination, the prerequisites to our

jurisdiction would not be satisfied, since petitioners did not

file their petition with this Court within 180 days after the

date of mailing of respondent's letter.    See sec. 6404(h)(1);

Rule 280(b)(2); Banat v. Commissioner, supra at 95.     The petition

was filed on July 20, 2006, nearly a year beyond the 180-day

period after the Letter 853C that was dated March 31, 2005.     See

Gati v. Commissioner, 113 T.C. 132 (1999).

     Accordingly, we shall grant respondent's motion to dismiss

for lack of jurisdiction.9

     To reflect the foregoing,


                                      An appropriate order of

                                 dismissal for lack of jurisdiction

                                 will be entered.




     9
       As respondent has not, insofar as the record discloses,
issued any notice of final determination not to abate interest
with respect to petitioners' 1994 and 1995 taxable years, nothing
precludes petitioners from filing a Form 843 to request abatement
of interest for those years. We express no view, however, on
whether petitioners have shown that they satisfy the requirements
of sec. 6404.
