                        T.C. Memo. 2001-227



                      UNITED STATES TAX COURT



                NINA H. PETTYJOHN, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 2264-00.                      Filed August 16, 2001.


     Nina H. Pettyjohn, pro se.

     John W. Sheffield III, for respondent.



             MEMORANDUM FINDINGS OF FACT AND OPINION


     DAWSON, Judge:   This case was assigned to Special Trial

Judge Robert N. Armen, Jr., pursuant to the provisions of section

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




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

and adopts the opinion of the Special Trial Judge, which is set

forth below.

                OPINION OF THE SPECIAL TRIAL JUDGE

     ARMEN, Special Trial Judge:   On August 25, 1999, respondent

issued a notice of final determination denying petitioner’s claim

for abatement of interest for the taxable years 1993, 1994, and

1995.2   Petitioner timely filed a petition under section 6404(i)

and Rules 280-284.3

     The issue for decision is whether respondent abused his

discretion by denying petitioner’s claim for abatement of

interest for the taxable years 1993, 1994, and 1995.   We hold

that respondent did not abuse his discretion.

                         FINDINGS OF FACT

     Many of the facts have been stipulated, and they are so

found.   Petitioner resided in Marietta, Georgia, at the time that


     2
        Although the Aug. 25, 1999, notice of final determination
purports to completely deny petitioner’s claim for abatement of
interest for all 3 taxable years, respondent had previously
agreed to abate interest (and did, in fact, do so) for the
taxable year 1993 for the period from Aug. 22, 1996, to July 7,
1997. This matter is discussed infra in subdivision E of our
Findings of Fact.
     3
        Sec. 6404(i) was originally enacted as sec. 6404(g) by
the Taxpayer Bill of Rights 2 (TBOR 2), Pub. L. 104-168, sec.
302, 110 Stat. 1452, 1457-1458 (1996). Sec. 6404(g) was
redesignated sec. 6404(i) by the Internal Revenue Service
Restructuring & Reform Act of 1998, Pub. L. 105-206, secs.
3505(a), 3309(a), 112 Stat. 685, 743, 745 (1998). However, Tit.
XXVII of the Tax Court Rules of Practice and Procedure, dealing
with actions for review of failure to abate interest, continues
to reflect the original statutory designation.
                               - 3 -

her petition was filed with this Court.

     At the outset, we note that the record in this case leaves

much to be desired.   Nevertheless, we have carefully reviewed the

evidence and done our best to make an appropriate disposition of

the case.

A.   Petitioner’s Practice of Deducting Gifts to Family Members

     On her income tax returns for 1988 through 1995, petitioner

deducted gifts that she made to various individuals, most if not

all of whom were family members.   These deductions served to

reduce petitioner’s taxable income and generate tax refunds for

those years.

     Petitioner admits that her practice of deducting gifts to

family members on her income tax returns was contrary to law.

See sec. 170(c).   Petitioner professes that she was motivated to

do so by the desire to reduce the estate tax upon her death, see

sec. 2001(a), and through a misunderstanding of the $10,000

annual exclusion for gift tax purposes, see sec. 2503(b).4

     Petitioner reckons that her practice of deducting gifts to

family members on her income tax returns generated erroneous

income tax refunds for 1988 through 1992 in the following

amounts:




     4
        For gift tax purposes, sec. 2503(b) allows a donor to
exclude from taxable gifts the first $10,000 of gifts of present
interests made to each donee during the taxable year.
                                  - 4 -

                  Year         Erroneous Refund1
                  1988             $1,900
                  1989              4,600
                  1990              4,900
                  1991              5,400
                  1992              6,500
                                   23,300

      1
        Rounded to the nearest $100.

      Respondent never examined any of petitioner’s income tax

returns for 1988 through 1992.5     However, in 1996, respondent

commenced examinations of petitioner’s income tax returns for

1993 through 1995.

B.   The Taxable Year 1993

      1.     Petitioner’s 1993 Tax Return and Notice of Deficiency

      Petitioner timely filed a Federal income tax return for

1993.      See sec. 6072(a).

      In or about July 1996, petitioner was notified in writing of

the examination of her 1993 income tax return through the receipt

of an examination report dated July 19, 1996.      The examination

report proposed, inter alia, to disallow the deduction petitioner

claimed for gifts to family members of $16,539.

      On or about August 18, 1996, petitioner mailed a letter to



      5
        Petitioner admits that she was “well rewarded” through
the receipt of refunds for the taxable years 1988 through 1992
for which there was no basis in law and the recovery of which by
respondent is barred by the statute of limitations on assessment.
See sec. 6501.
                                 - 5 -

respondent’s Atlanta Service Center, together with a personal

check in the amount of $1,500, agreeing with the examination

report insofar as the disallowance of the deduction for gifts to

family members was concerned.     Petitioner’s letter and check were

received by the Service Center on August 22, 1996.      However, the

letter was apparently not forwarded to the examining agent.

Consequently, on September 19, 1996, respondent sent petitioner a

notice of deficiency which was substantively identical to the

examination report.

     On September 30, 1996, petitioner timely filed an imperfect

petition for redetermination (assigned docket No. 21486-96) with

this Court.     See sec. 6213(a); Rule 34.   On December 2, 1996,

petitioner perfected her petition by filing a proper amended

petition.     Upon the filing of respondent’s answer on March 28,

1997, the case was at issue.     See Rule 38.

     2.     The Stipulated Decision

     By letter dated June 10, 1997, respondent’s Appeals Office

in Atlanta, Georgia, mailed a proposed stipulated decision to

petitioner.     The proposed stipulated decision reflected a

deficiency in petitioner’s income tax for 1993 of $2,115 based

solely on the disallowance of the deduction for gifts to family

members.6




     6
        Respondent conceded all other substantive adjustments
made in the Sept. 19, 1996, notice of deficiency.
                               - 6 -

     Initially, petitioner refused to execute the proposed

stipulated decision, even though she accepted the $2,115

deficiency, because “The IRS tax-examiners are at fault.”

     Since the IRS tax-examiners are responsible for
     allowing the gift-giving for a total of eight years
     [petitioner wrote], compound interest should be waived
     * * * . A deficiency occurred because of complete and
     total failure of their job performance. They were
     responsible, through their determination, for eight
     years of erroneous refund checks.

Ultimately, however, on October 14, 1997, petitioner executed the

proposed stipulated decision, which was entered by the Court on

November 17, 1997.   See sec. 7459(a), (c).

     The stipulated decision included a number of stipulations by

the parties, among them the following:

          It is further stipulated that there is a
     prepayment credit for the taxable year 1993 in the
     amount of $1,500. It is stipulated that the deficiency
     for the taxable year 1993 is computed without
     considering the prepayment credit of $1,500.

        *       *       *        *       *      *       *

          It is further stipulated that interest will be
     assessed as provided by law on the deficiency in tax
     due from petitioner.

     On February 9, 1998, respondent assessed the $2,115

deficiency in income tax, together with interest of $602.67.   On

that same date, respondent also sent petitioner a notice of

balance due.
                                - 7 -

     3.    Payment of Petitioner’s Account Balance

     As of February 9, 1998, petitioner’s account balance was

$1,217.67, calculated as follows:

          Date           Event                   Amount
     Aug. 22, 1996    Advance payment         ($1,500.00)
     Feb. 9, 1998     Assessment/tax            2,115.00
     Feb. 9, 1998     Assessment/interest         602.67
                                                1,217.67

     By October 13, 1999, petitioner’s account was fully paid

through:    (1) The application of overpayments of income tax

claimed by petitioner on her 1997 and 1998 income tax returns,

see sec. 6402(a); (2) subsequent payments by petitioner; and (3)

the abatement of interest, described infra in subdivision E of

our Findings of Fact.

     4.    Petitioner’s Claim for Abatement of Interest

     Using Form 843, petitioner filed with respondent on or about

July 27, 1998, a Claim for Refund and Request for Abatement.    In
her claim, petitioner requested that interest on her 1993

deficiency in income tax be abated or refunded because of “IRS

errors or delay”, specifically, IRS tax examiners’ “failure in

job performance”.

     See infra subdivision E of our Findings of Fact regarding
action by respondent on petitioner’s claim for abatement of

interest.
                                 - 8 -

C.   The Taxable Year 1994

     1. Petitioner’s 1994 Tax Return and Examination Report

     Petitioner timely filed a Federal income tax return for

1994.     See sec. 6072(a).

     On or about August 9, 1996, petitioner was notified of the

examination of her 1994 income tax return.     Notification of the

examination apparently prompted petitioner to make an advance

payment of $500, which was posted to petitioner’s account on

September 19, 1996.

     By an examination report dated October 1, 1996, respondent

proposed a deficiency in petitioner’s income tax of $3,966, which

was principally attributable to the disallowance of gifts to

family members of $21,815.     Petitioner agreed to the proposed

deficiency.     Accordingly, on October 28, 1996, respondent

assessed a $3,966 deficiency in income tax, together with

interest of $509.86.     On that same date, respondent also sent

petitioner a notice of balance due of $3,975.86 (i.e., deficiency
of $3,966, plus interest of $509.86, less advance payment of

$500).

     2.     Payment of Petitioner’s Account Balance

     As indicated, petitioner’s account balance as of October 28,

1996, was $3,975.86.     By April 3, 1997, petitioner’s account was

fully paid through:     (1) A subsequent payment by petitioner; and
                                 - 9 -

(2) a levy on petitioner’s account at the Lockheed Credit Union.7

     3.    Petitioner’s Claim for Abatement of Interest

     Using Form 843, petitioner filed with respondent on or about

September 4, 1998, a Claim for Refund and Request for Abatement.

In her claim, petitioner requested that interest on her 1994

deficiency in income tax be abated or refunded because of “IRS

errors or delay”.

     See infra subdivision E of our Findings of Fact regarding
action by respondent on petitioner’s claim for abatement of

interest.

D.   The Taxable Year 1995

     1.     Petitioner’s 1995 Tax Return and Notice of Deficiency

     Petitioner timely filed a Federal income tax return for

1995.     See sec. 6072(a).

     In or about October 1996, petitioner was notified in writing

of the examination of her 1995 income tax return through the

receipt of an examination report dated October 4, 1996.     The

examination report proposed a deficiency in income tax of $9,698.

The proposed deficiency was principally attributable to the

disallowance of the deduction claimed by petitioner for gifts to

family members of $37,510.




     7
        A credit balance in petitioner’s account with respondent,
which was attributable to an excess of proceeds received through
the levy, was refunded to petitioner on Apr. 28, 1997.
                                - 10 -

     On December 23, 1996, respondent sent petitioner a notice of

deficiency which was substantively identical to the examination

report.    Petitioner did not timely file a petition with this

Court.    See sec. 6213(a).   Rather, petitioner paid the

deficiency in tax, but not the interest thereon.     Thus, on March

27, 1997, a payment of $9,698 was posted to petitioner’s account.

     On May 26, 1997, respondent assessed the $9,698 deficiency

in income tax, together with interest of $802.12.     See secs.

6213(a), 6503(a)(1).    On that same date, respondent also sent

petitioner a notice of balance due regarding the unpaid interest.

     2.    Payment of Petitioner’s Account Balance

     As of May 26, 1997, petitioner’s account balance was

$802.12, calculated as follows:

          Date            Event                   Amount
     Mar. 27, 1997     Advance payment         ($9,698.00)
     May 26, 1997      Assessment/tax            9,698.00
     May 26, 1997      Assessment/interest         802.12
                                                   802.12

     By April 15, 2000, petitioner’s account was fully paid

through:    (1) A levy on a Georgia State income tax refund that

was due petitioner; and (2) the application of part of an

overpayment of income tax claimed by petitioner on her 1999

Federal income tax return.     See sec. 6402(a).

     3.    Petitioner’s Claim for Abatement of Interest

     Using Form 843, petitioner filed with respondent on or about
                              - 11 -

July 27, 1998, a Claim for Refund and Request for Abatement.     In

her claim, petitioner requested that interest on her 1995

deficiency in income tax be abated or refunded because of “IRS

errors or delay”.   In this regard, petitioner recited in her

claim:

     Job failure by IRS strips taxpayer of their rights.
     Abatement of interest should be easy.

     See infra subdivision E of our Findings of Fact regarding

action by respondent on petitioner’s claim for abatement of

interest.

E.   Action by Respondent on Petitioner’s Claims for Abatement

     By letter dated October 27, 1998, which referenced the

taxable years 1993, 1994, and 1995, respondent’s Problem

Resolution Office in the Atlanta Service Center advised

petitioner, in part, as follows:

          We reviewed each one of your claims for abatement
     of interest under the provisions of Internal Revenue
     Code Section 6404(e)(1) & (2). For 1993 we have
     partially allowed your claim for $89.63 in interest.

          For 1994 and 1995, it has been determined that
     there were no errors or delays relating to ministerial
     acts performed during the audits of these two tax
     years. We have therefore, issued a certified
     disallowance letter for both years. You may appeal the
     decision to disallow these claims for 1994 and 1995.
     You may also appeal the partial disallowance of your
     claim for 1993.

     By certified letter also dated October 27, 1998, which

referenced just the taxable year 1993, the director of
                              - 12 -

respondent’s Atlanta Service Center advised petitioner of

respondent’s intention to abate interest on petitioner’s $2,115

deficiency in income tax for 1993 for the period from August 22,

1996, to July 7, 1997.   The letter stated, in part, as follows:

     After an extensive review of your file, we have
     determined that the provisions of the Internal Revenue
     Code Section 6404(e)(1) apply to the following time
     period and amount:

     Period: August 22, 1996 to July 7, 1997   Amount: $89.63

     The reason for the allowance of this amount is that
     there was a ministerial delay in associating your reply
     to the original 30-day letter with the case file. The
     reply was received in the Atlanta Service Center on
     August 22, 1996. No action had been taken in regards
     to this information until the Appeals Officer presented
     you with a settlement on July 7, 1997. We have
     therefore abated the accrual of interest on the balance
     of tax owed after your payment of $1,500.00 (received
     on August 22, 1996) was applied. Your balance of
     $615.00 had interest accruals totaling $89.63 for this
     time period.

        *       *        *      *       *         *       *

     * * * The interest abatement only applies to the period
     shown above.

     If your claim has not been allowed in full for the time
     period and amount requested, you may request reconsideration
     with our Appeals Office.

     Interest will continue to be charged on any unpaid
     liability, except for the above abatement period.

     Subsequently, respondent abated $89.63 of interest on

petitioner’s deficiency in income tax for 1993.

     By a second certified letter also dated October 27, 1998,
                              - 13 -

which referenced just the taxable years 1994 and 1995, the

director of respondent’s Atlanta Service Center advised

petitioner of respondent’s intention not to abate interest on the

deficiencies in income taxes for those 2 years because “There

were no delays or errors relating to the performance of [a]

ministerial act”.   The letter also stated, in part, as follows:

          Under Internal Revenue Code Section 6404(e)(1),
     interest may only be abated on errors or delays that
     occur after the date the Internal Revenue Service
     contacts the taxpayer in writing with respect to the
     deficiency or payment. The amount accrued prior to
     this date cannot be abated regardless of the period
     that may have elapsed since the taxpayer’s return was
     filed. Your requests for abatement of interest were
     based on acts that happened prior to the Internal
     Revenue Service’s contacts with you in respect to the
     deficiencies of 1994 and 1995 tax years.

          Filing your 1988 through 1995 tax returns without
     an audit being performed to alert you that the “gift
     giving” deduction should not be allowed happened prior
     to the Internal Revenue Service’s contacts with you in
     regards to the deficiencies. Therefore, this time
     period does not qualify for abatement of interest under
     Internal Revenue Code Section 6404(e)(1).

          There were also no erroneous refunds, which were
     issued to you due to errors or oversights by the
     Internal Revenue Service. Under Internal Revenue Code
     Section 6404(e)(2), interest may be abated with respect
     to a erroneous refund check. The Secretary shall abate
     the assessment of all interest on any erroneous refund
     until the date demand for repayment is made, unless (1)
     the taxpayer (or related party) has in any way caused
     such erroneous refund or (2) such erroneous refund
     exceeds $50,000.

          In reviewing your claim for abatement of interest
     under the “erroneous refund” provisions, it has been
     determined that all refunds issued to you were based on
     the original filing of your individual Form 1040 for
     each tax year. Your contention that the Tax Examiners
     should have noticed and not allowed the tax free gift-
                              - 14 -

     giving on your returns during processing could not be
     did [sic] within the authority of the Internal Revenue
     Code.

          Only mathematical or clerical errors are corrected
     during the processing of returns in accordance with
     Internal Revenue Code section 6213(b). * * *

          All other assessments of tax must be made by using
     deficiency procedures which allow a taxpayer to
     exercise his/her appeal rights in cases where the
     taxpayer does not agree. Therefore, tax issues that
     require any proof or documentation to be presented by
     the taxpayer may not be corrected during processing.

       *        *       *       *       *       *        *

          If you do not accept our findings, you may request
     reconsideration with our Appeals Office.

          Interest will continue to accrue on any unpaid
     liability.

     Petitioner exercised her administrative appeal rights.

Thereafter, by letter dated August 4, 1999, an Appeals officer in

respondent’s Atlanta Appeals Office advised petitioner that

“Based upon a thorough review of your case my preliminary

evaluation is that no additional interest abatement is

appropriate.”   The Appeals officer further wrote:

     Your position is that you should not be liable for
     interest for the reason that IRS did not challenge your
     erroneous deductions for unsupportable charitable
     contributions for a number of years prior to the years
     for which you were audited. I regret that this does
     not fall within the interest abatement provisions of
     the Internal Revenue Code.

     Petitioner was given 15 days from the date of the letter to
                               - 15 -

provide additional information for further consideration.    The

record does not reflect that petitioner submitted any additional

information.

     Subsequently, by certified letter dated August 25, 1999,

respondent issued a notice of final determination denying

petitioner’s claims for the abatement of interest for the taxable

years 1993, 1994, and 1995.

F.   Tax Court Litigation

     On February 23, 2000, petitioner commenced an action in this

Court by filing a petition, pursuant to section 6404(i) and Rules

280-284, for review of respondent’s failure to abate interest

with respect to the taxable years 1993, 1994, and 1995.8

Thereafter, on April 13, 2000, petitioner filed an amended

petition, alleging, inter alia, that “My claim is failure (error)

and delay in the audits of 1993, 1994 and 1995".




     8
         In pertinent part, sec. 6404(i) provides that

          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.

     Petitioner meets the net worth requirements of sec.
7430(c)(4)(A)(ii), and her action was timely commenced. See sec.
7502(a).
                              - 16 -

                              OPINION

     In general, interest on a deficiency in income tax begins to

accrue on the due date of the return for such tax and continues

to accrue, compounding daily, until payment is made.    See secs.

6001(a), 6622(a).

     This Court may order an abatement of interest only if there

is an abuse of discretion by the Commissioner in failing to abate

interest.   Sec. 6404(i), formerly 6404(g).   In order to

demonstrate an abuse of discretion, a taxpayer must prove that

the Commissioner exercised his discretion arbitrarily,

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

142(a); Lee v. Commissioner, 113 T.C. 145, 149 (1999); Woodral v.

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

     The Commissioner has the authority to abate, in whole or in

part, an assessment of interest on a deficiency if the accrual of

such interest is attributable to an error or delay by an officer

or employee of the Internal Revenue Service (IRS), acting in his

or her official capacity, in performing a ministerial act.    See

sec. 6404(e)(1).9   An error or delay by the Commissioner can be

taken into account only:   (1) If it occurs after the Commissioner


     9
        Sec. 6404(e) was amended in 1996 by TBOR 2 sec. 301, 110
Stat. 1457, to permit the Commissioner to abate interest with
respect to an “unreasonable” error or delay resulting from
“managerial” or ministerial acts. The amendment applies to
interest accruing with respect to deficiencies for taxable years
beginning after July 30, 1996; accordingly, the amendment is
inapplicable in the present case. See Woodral v. Commissioner,
112 T.C. 19, 25 n.8 (1999).
                               - 17 -

has contacted the taxpayer in writing with respect to the

deficiency and (2) if no significant aspect of the error or delay

is attributable to the taxpayer.    See sec. 6404(e)(1); Krugman v.

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

T.C. Memo. 1999-376.    Section 6404(e)(1) “does not therefore

permit the abatement of interest for the period of time between

the date the taxpayer files a return and the date the IRS

commences an audit, regardless of the length of that time

period.”   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. (Vol. 3) 1, 208.

     Congress did not intend for section 6404(e) to be used

routinely.   Accordingly, we order abatement only “where failure

to abate interest would be widely perceived as grossly unfair.”

Lee v. Commissioner, supra at 149; H. Rept. 99-426, supra at 844,
1986-3 C.B. (Vol. 2) at 844; S. Rept. 99-313, supra at 208, 1986-

3 C.B. (Vol. 3) at 208.

     As we understand her argument, petitioner contends that

respondent’s failure to examine her income tax returns for 1988

through 1992 caused her to claim the same type of deductions, for

which there was no basis in law, on her income tax returns for

1993, 1994, and 1995.    Accordingly, in petitioner’s view,

interest on the deficiencies in income taxes for 1993, 1994, and

1995 should be abated because that interest is attributable to
                               - 18 -

“errors or delay” on the part of respondent’s tax examiners.10

     In order for petitioner to prevail, there must be an error

or delay in performing a ministerial act that is attributable to

respondent.11   A “ministerial act” does not involve the exercise

of judgment or discretion.   Sec. 301.6404-2T(b)(1), Temporary

Proced. & Admin. Regs., 52 Fed. Reg. 30163 (Aug. 13, 1987).

Rather, a ministerial act means a procedural or mechanical act

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.   See id.   Examples of ministerial

acts are provided in the regulations.   See sec. 301.6404-

2T(b)(2), Temporary Proced. & Admin. Regs., 52 Fed. Reg. 30163

(Aug. 13, 1987).   In contrast, a decision concerning the proper

application of Federal tax law, or other applicable Federal or



     10
        Sec. 6404(e) requires not only the identification of an
error or delay caused by a ministerial act on the Commissioner’s
part, but also identification of a specific period of time over
which interest should be abated as a result of that error or
delay. See Donovan v. Commissioner, T.C. Memo. 2000-220. In the
present case, petitioner has not focused on this correlation
between the error or delay attributable to a ministerial act on
respondent’s part and a specific period of time; rather,
petitioner is essentially requesting that all interest with
respect to the deficiencies in income taxes for 1993, 1994, and
1995 be abated. In effect, petitioner is requesting an exemption
from interest, rather than an abatement of interest. However,
the scope of her request is beyond that contemplated by the
statute. See id.
     11
        Further, an abatement of interest “only applies to the
period of time attributable to the failure to perform the
ministerial act.” 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.
(Vol. 3) 1, 208; see supra note 9.
                               - 19 -

State law, is not a ministerial act.     See sec. 301.6404-2T(b)(1),

Temporary Proced. & Admin. Regs., supra.      The mere passage of

time does not establish error or delay in performing a

ministerial act.    Scott v. Commissioner, T.C. Memo. 2000-369;

Hawksley v. Commissioner, T.C. Memo. 2000-354.

     For purposes of section 6404(e), an error or delay cannot be

considered, for each of the years in issue, for the period before

the following operative date, because such date is the date on

which respondent first contacted petitioner in writing concerning

an audit procedure for the particular year in issue:

           Operative Date               Taxable Year
           July 19, 19961                   1993
           Aug. 9, 1996                     1994
           Oct. 4, 19961                    1995
     1
      The July 19, 1996 and October 4, 1996 dates are the dates
of the examination reports for the taxable years 1993 and 1995,
respectively.
See sec. 6404(e)(1); Krugman v. Commissioner, supra; Nerad v.
Commissioner, supra.

     We turn now to petitioner’s contention regarding why

interest should be abated.

     Petitioner contends that interest on the deficiencies in

income taxes for 1993, 1994, and 1995 is attributable to “errors

or delay” on respondent’s part in failing to examine her income

tax returns for 1988 through 1992 and alerting her to the fact

that there was no basis in law for her deductions for gifts to

family members.    However, it is readily apparent that
                              - 20 -

respondent’s decision to examine, or not or examine, a taxpayer’s

income tax return for a particular taxable year involves the

exercise of judgment and discretion.   Respondent’s decision in

that regard is not, therefore, a ministerial act, see sec.

301.6404-2T(b)(1), Temporary Proced. & Admin. Regs., supra, and

cannot provide a basis for abating interest under section

6404(e).

     Section 301.6404-2T(b)(1), Temporary Proced. & Admin. Regs.,

supra, may very well provide a sufficient foundation on which to

enter decision for respondent.   Nevertheless, we will review the

relevant facts and circumstances for each of the years in issue

in order to decide whether there was an error or delay by

respondent in performing a ministerial act after the operative

date (as identified supra p. 19) that might justify an abatement

of interest.

A.   The Taxable Year 1993

     In or about July 1996, petitioner was notified in writing of

the examination of her 1993 income tax return through the receipt

of an examination report (the so-called 30-day letter) dated July

19, 1996.   Petitioner responded to the examination report timely

by mailing a letter, together with a $1,500 check, which the

Atlanta Service Center received on August 22, 1996.   However,

because petitioner’s letter was apparently not forwarded to the

examining agent, respondent sent petitioner a notice of

deficiency, which prompted petitioner to file a petition with
                               - 21 -

this Court.    It was not until the following summer that

respondent’s Appeals Office in Atlanta sent petitioner a proposed

stipulated decision reflecting a deficiency based solely on the

disallowance of the deduction for gifts to family members.

     By a certified letter dated October 27, 1998, respondent

exercised his discretion to abate interest for the period from

August 22, 1996, to July 7, 1997, because of the “ministerial

delay in associating your reply to the original 30-day letter

with the case file.”    However, any delay after July 7, 1997, was

attributable to petitioner’s unjustified refusal to sign the

proposed stipulated decision until mid-October, which delayed

entry of decision by the Court until mid-November.    See sec.

6404(e)(1) (“an error or delay shall be taken into account only

if no significant aspect of such error or delay can be attributed

to the taxpayer involved”).    Notably, the Court’s decision

included a stipulation by the parties that interest would be

assessed “as provided by law on the deficiency in tax due from

petitioner.”

     In our view, the record does not reveal any ministerial

error or delay by respondent, other than as conceded by

respondent.    Accordingly, we hold that respondent did not abuse

his discretion in refusing to abate interest for the period from

July 19 to August 21, 1996, and for the period from July 8, 1997,

to October 13, 1999, the date on which petitioner’s account was

fully paid.
                                - 22 -

B.   The Taxable Year 1994

     On or about August 9, 1996, petitioner was notified of the

examination of her 1994 income tax return.    Notification of the

examination apparently prompted petitioner to make an advance

payment of $500, which was posted to petitioner’s account on

September 19, 1996.     Shortly thereafter, by an examination report

dated October 1, 1996, respondent proposed a deficiency in

petitioner’s income tax of $3,966, to which petitioner agreed.

On October 28, 1996, respondent assessed the deficiency and

interest thereon.

     In our view, the record does not reveal any ministerial

error or delay by respondent.    Accordingly, we hold that

respondent did not abuse his discretion in refusing to abate

interest for the period from August 9, 1996, to April 3, 1997,

the date on which petitioner’s account was fully paid.

C.   The Taxable Year 1995

     In or about October 1996, petitioner was notified in writing
of the examination of her 1995 income tax return through the

receipt of an examination report dated October 4, 1996.

Thereafter, on December 23, 1996, respondent sent petitioner a

notice of deficiency, which was substantively identical to the

examination report.12    Petitioner did not timely file a petition


     12
        In contrast to the sending of the notice of deficiency
for 1993, there is nothing in the record to suggest that
respondent erred in sending petitioner a notice of deficiency for
                                                   (continued...)
                                 - 23 -

with this Court.     Rather, petitioner paid the deficiency in tax,

but not the interest thereon.     Accordingly, on May 26, 1997,

respondent assessed the deficiency, together with interest

thereon, and sent petitioner a notice of balance due regarding

the unpaid interest.

     In our view, the record does not reveal any ministerial

error or delay by respondent.     Any delay in the assessment of the

deficiency is attributable to petitioner, who could have

consented in writing to the assessment at an earlier stage in the

process.     See sec. 6213(d).   Further, interest accruing after the

date on which the deficiency was paid is due to petitioner’s

failure to pay the outstanding interest and not due to a

ministerial act on respondent’s part.     See Donovan v.

Commissioner, T.C. Memo. 2000-220; see also sec. 6404(e)(1) (“an

error or delay shall be taken into account only if no significant

aspect of such error or delay can be attributed to the taxpayer

involved”).     Accordingly, we hold that respondent did not abuse

his discretion in refusing to abate interest for the period from

October 4, 1996, to April 15, 2000, the date on which

petitioner’s account was fully paid.

D.   Section 6404(e)(2)

     Finally, although petitioner does not cite or expressly rely

on section 6404(e)(2), we think it appropriate to comment on that


     12
          (...continued)
1995.
                              - 24 -

section.

     Section 6404(e)(2) provides, in pertinent part, that the

Commissioner:

     shall abate the assessment of all interest on any
     erroneous refund * * * until the date demand for
     repayment is made, unless--
                 (A) the taxpayer (or a related party)
          has in any way caused such erroneous refund *
          * *.

     Petitioner contends that the refunds that she received for

the taxable years 1988 through 1995 were erroneous.    What

petitioner ignores, however, is that she precipitated the receipt

of those refunds by filing income tax returns that claimed

overpayments of income tax.   Petitioner would apparently have

respondent examine every return that claims an overpayment before

issuing a refund check.   Such an approach would be

administratively impracticable, if not impossible.    In any event,

the law does not require the Commissioner to take such an

approach; rather, the law requires taxpayers to take

responsibility for their returns, something petitioner appears

loath to do.

E.   Conclusion

      We hold that respondent did not abuse his discretion in

refusing to abate interest on the deficiencies in income taxes

for any of the years in issue.   Accordingly,

                                         Decision will be entered

                                    for respondent.
