rejecting the taxpayer's argument that he had shifted the burden of proof to the Commissioner where the taxpayer first raised the argument in his reply brief
How later courts described this case
- rejecting the taxpayer's argument that he had shifted the burden of proof to the Commissioner where the taxpayer first raised the argument in his reply brief
Written by the judges who cited it.
The opinion
T.C. Memo. 2007-40
UNITED STATES TAX COURT
BERNARD A. KANSKY, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket Nos. 9544-04, 24528-04L. Filed February 20, 2007.
Bernard A. Kansky, pro se.
Michael R. Fiore, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
THORNTON, Judge: In these consolidated cases, petitioner
seeks review pursuant to sections 6320(c) and 6330(d) of
respondent’s determination sustaining the filing of tax liens
with respect to petitioner’s Federal income taxes for years 1987,
1990, 1991, 1997, 1998, 2000, and 2001; petitioner also seeks
review pursuant to section 6404(h) of respondent’s denial of
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petitioner’s request to abate interest for tax years 1987, 1990,
and 1991.1
FINDINGS OF FACT
The parties have stipulated some facts, which we incorporate
herein by this reference. When he filed his petition, petitioner
resided in Needham, Massachusetts.
Petitioner’s Tax Years 1987 Through 1991
Petitioner has been a practicing attorney for over 40 years.
For tax years 1987 through 1991, petitioner failed to file
Federal income tax returns. In 1992, respondent issued a summons
directing petitioner to appear at the Stoneham, Massachusetts,
IRS office and produce his records relating to his 1987 through
1991 income. In response to the summons, on November 12, 1992,
petitioner produced seven or eight boxes of documents relating to
personal expenses but not to his income. By letter dated
February 8, 1993, respondent’s revenue agent notified petitioner
that the documents he had provided failed to satisfy the summons
and requested petitioner to provide bank deposit records and all
books and records relating to petitioner’s income. Subsequently,
at some unspecified date, petitioner produced what he
characterizes as “one small shoe box size of records/receipts”.
1
Unless otherwise indicated, all section references are to
the Internal Revenue Code. All Rule references are to the Tax
Court Rules of Practice and Procedure.
- 3 -
In February 1996, after various meetings with respondent’s
agents, petitioner submitted his delinquent returns for 1987
through 1991. Petitioner’s cover letter dated February 23, 1996,
and addressed to respondent’s revenue agent, alluded to personal
problems in petitioner’s family as the reason for the untimely
filings and concluded: “Again, thank you for your
professionalism and patience in the above matter during, and as a
result of the difficulties we have faced”.
On March 19, 1996, respondent issued a 30-day letter,
proposing adjustments to petitioner’s taxes for 1987 through
1991. By letter dated March 20, 1996, petitioner protested the
proposed adjustments.
On September 16, 1998, after consideration of petitioner’s
case by the Appeals Office, respondent issued to petitioner a
notice of deficiency for 1987 through 1991. On December 14,
1998, petitioner filed a petition in this Court, seeking
redetermination of the proposed deficiencies and additions to
tax. On November 5, 1999, pursuant to the parties’ stipulation,
this Court entered its decision in the deficiency case, deciding
that petitioner had deficiencies of $2,413, $12,000, and $4,000,
for 1987, 1990, and 1991, respectively, and had no deficiencies
or overpayments for 1988 and 1989. Petitioner did not appeal
this decision.
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Petitioner’s Returns for 1994 Through 2001
Petitioner filed Federal tax returns for 1994 through 2001.
For every year except 1999, petitioner failed to fully pay the
liabilities shown on those returns.
Installment Agreements
Petitioner entered into one or more installment agreements
that eventually covered all years at issue except 2001. More
particularly, according to respondent’s transcripts of
petitioner’s account, petitioner’s liabilities for various years
were made subject to one or more installment agreements on the
following dates:2
Date Tax Years
May 21, 1999 1994, 1995, and 1997
Oct. 3, 1999 1998
Jan. 1, 2000 1996
Mar. 13, 2000 1987, 1990, and 1991
Mar. 22, 2000 2000
According to respondent’s transcripts of petitioner’s
account, between June 1999 and March 2002 petitioner made 31
installment payments of about $750 each; respondent credited
these payments variously to petitioner’s 1987, 1994, and 1995
2
The record does not contain copies of any installment
agreements or any detailed information about them. It is unclear
from the record whether respondent and petitioner entered into
new installment agreements on these various dates or whether
existing installment agreements were modified to include
additional liabilities on these various dates.
- 5 -
years.3 After March 2002, petitioner stopped making installment
payments.
Collection Activity
On April 22, 2003, respondent sent petitioner a Notice of
Federal Tax Lien Filing and Your Right to a Hearing Under IRC
6320 with respect to petitioner’s Federal income tax liabilities
for 1987, 1990, 1991, 1997, 1998, 2000, and 2001. The notice
indicated that the total tax petitioner owed for these years was
about $65,231 (exclusive of interest), with about $42,631 of this
amount attributable to 1987, 1990, and 1991.
On April 24, 2003, petitioner sent respondent a Form 12153,
Request for a Collection Due Process Hearing. On the Form 12153,
petitioner disputed his underlying tax liabilities for 1987,
1990, and 1991 on the ground that his liabilities for those years
should have been eliminated by net operating loss carrybacks and
carryforwards from 1988 and 1989. Petitioner complained that the
time for claiming these carrybacks and carryforwards had
“expired” while respondent’s revenue agents had control of his
3
With respect to petitioner’s 1987 year, respondent’s
transcripts of petitioner’s account show installment payments of
$750 each on July 30 and Aug. 30, 2000, Feb. 24, Mar. 8, and June
1, 2001, and Mar. 6, 2002. With respect to petitioner’s 1994
year, respondent’s transcripts of petitioner’s account show 18
installment payments of $750 each (except for one of $726)
between Dec. 1, 1999, and Feb. 5, 2002. With respect to
petitioner’s 1995 year, respondent’s transcripts of petitioner’s
account show seven installment payments of $750 each (except for
one of $708) between June 27, 1999, and Jan. 3, 2002.
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files. Petitioner alleged that he had attempted to satisfy his
tax debt by making installment payments of $750 per month until
he became ill with cancer. Petitioner also alleged that the
collection activity was “premature” because his request for
“equitable relief” was still “under review”.4
By letter dated April 13, 2004, respondent’s settlement
officer scheduled a hearing on May 6, 2004. In the letter, the
settlement officer stated that if petitioner wished her to
consider collection alternatives, such as an offer-in-compromise,
he had to provide, within 10 days, certain documentation,
including completed collection information statements and a copy
of his filed 2003 Federal income tax return.
At petitioner’s request, the meeting was rescheduled and, by
agreement, the hearing was held by telephone on June 8, 2004.
Petitioner expressed a desire to submit an offer-in-compromise.
The settlement officer set a deadline of July 14, 2004, for
petitioner to submit a completed offer-in-compromise, as well as
a completed Form 433-A, Collection Information Statement for
Individuals, and Form 433-B, Collection Information Statement for
Businesses. At petitioner’s request, the settlement officer
extended this deadline to July 21, 2004.
4
It appears that petitioner’s reference to his request for
“equitable relief” refers to his Form 843, Claim for Refund and
Request for Abatement, filed on June 4, 2001, as discussed below.
- 7 -
On July 22, 2004, respondent received from petitioner Form
656, Offer in Compromise, and Form 433-A, but no Form 433-B. On
the Form 656, petitioner checked boxes indicating that he was
submitting his offer-in-compromise on the grounds of doubt as to
liability, doubt as to collectibility, and effective tax
administration. He offered “$12,500 * * * to be applied first to
pay’ts to my Social Security Account” in compromise of tax
liabilities totaling approximately $115,000 (including accrued
interest). Petitioner altered the standard terms of the Form 656
so as to eliminate the statement that he was signing under
penalties of perjury. As the basis for his offer-in-compromise,
petitioner alleged that respondent’s revenue agents had engaged
in “ministerial and managerial misconduct” by failing to review
more promptly the boxes of documents he had submitted on November
12, 1992, in response to the summons. He challenged his
underlying tax liabilities for 1987 through 1991.
Petitioner also altered the standard terms of the Form 433-A
so as to eliminate the statement that he was signing under
penalties of perjury. On the Form 433-A, petitioner failed to
disclose his ownership interest in certain real estate.
After evaluating petitioner’s offer-in-compromise and Form
433-A, by letter dated September 30, 2004, the settlement officer
requested additional information from petitioner, including a
Form 433-B for petitioner’s business, a copy of petitioner’s 2003
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return, and information about three specified real properties.
In addition, the settlement officer stated that she had
determined the fair market value of petitioner’s residence to be
$699,710 and offered petitioner an opportunity to submit an
appraisal if he disputed this value. The settlement officer
requested all information by October 15, 2004, and informed
petitioner that she would be making her determination at that
time.
Petitioner provided none of the additional documentation
requested by the settlement officer. In an October 4, 2004,
letter to the settlement officer, petitioner stated
that his personal residence was in a “tired” condition and that
his property assessment had been reduced from $600,000 to
“$400,000. plus”. He stated that two of the real properties for
which the settlement officer had requested information were owned
by trusts, and that the other real property was owned by his
wife. He stated that he and his family had experienced health
problems.
By letter dated October 6, 2004, the settlement officer
confirmed a telephone conversation with petitioner in which it
was agreed that petitioner would submit by October 15, 2004, all
of the information requested in her letter dated September 30,
2004. The settlement officer also requested this additional
information: (1) Documents verifying a reduced assessment on
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petitioner’s residence; (2) verification of petitioner’s and his
family’s health problems; and (3) the trust documents and
beneficiary schedules for the trusts referenced in petitioner’s
letter. The settlement officer requested this additional
information by October 21, 2004, and informed petitioner that she
would be making her determination at that time. Petitioner
failed to provide any of the requested documentation.
On November 23, 2004, respondent sent petitioner a Notice of
Determination Concerning Collection Action(s) Under Section 6320
and/or 6330 for 1987, 1990, 1991, 1997, 1998, 2000, and 2001 (the
determination). The determination concluded that petitioner was
not entitled to challenge his tax liabilities for 1987, 1990, and
1991, as those liabilities had been litigated in the Tax Court.
In her determination, the settlement officer also concluded that
petitioner did not qualify for an offer-in-compromise on grounds
of doubt as to liability because, as just noted, petitioner was
precluded from challenging his 1987, 1990, and 1991 liabilities.
The settlement officer concluded that petitioner did not qualify
for an offer-in-compromise on the basis of doubt as to
collectibility because, after taking into consideration
petitioner’s equity in his residence, petitioner had the means to
fully pay the liabilities.5 Finally, she concluded that because
5
The settlement officer determined that petitioner had
$192,892 of equity in his residence, on the basis of a “forced
(continued...)
- 10 -
petitioner had failed to comply with her requests to verify his
health claims, he did not qualify for an offer-in-compromise on
the basis of effective tax administration. Accordingly, no
viable collection alternative having been proposed, the
settlement officer sustained respondent’s collection action.
In his petition in docket No. 24528-04L, petitioner
challenges respondent’s collection action. The petition states
that “The only years which should be in question are the tax
years 1987, 1990 and 1991” and adds:
The only reason that the tax years 1987, 1990 and 1991
remain unpaid is that despite the taxpayer’s earmarking
funds for the years due, the IRS nevertheless applied
those payments instead, in such a haphazard manner so
as to leave the oldest years ongoing and outstanding,
thereby increasing the amount of compounding interest
for even greater and extended periods of time.
In his petition, petitioner alleges that he sustained an
overall net loss for 1987 through 1991 and that loss carrybacks
and carryforwards should eliminate any Federal income tax for
these years. He claims to have already paid the IRS $27,000,
representing 36 installment payments of $750 each.
5
(...continued)
sale value” of $508,880, reduced by a $123,096 encumbrance on the
real estate and further reduced by 50 percent to reflect
petitioner’s joint ownership with his wife.
- 11 -
Request for Interest Abatement
In his Form 843, Claim for Refund and Request for Abatement,
dated June 4, 2001, petitioner requested abatement of interest
and penalties for 1990 on the following grounds:
1. IRS failed to work on 1990 tax return for 4 years
after compelling production of records in 1992 and not
getting to those records until early 1996. Interest
caused by IRS delays.
2. IRS failed to allow $20,281.67 for health ins. and
related health benefits offered by office on 1040C
schedule and limited deduction to modified 1040
Schedule A.
3. IRS by its undue delays i.e. 4 years - willfully and
deliberately deprived taxpayer of 1989 carryfoward loss
which would have totally eliminated all taxes interest
and penalties and would have resulted in a zero balance
for 1990 i.e. no taxes, penalties or interest. * * *
4. Also in furtherance of willful misconduct, IRS has
not applied payments made on account to oldest
principal balance, but applies payments erratically and
sporatically to more recent balance claimed.
5. Also IRS has ignored payments made in 1996
designated as payment in full of all prior alleged
outstanding claims.
6. IRS failed to advise that its results reported to MA
By letter dated April 17, 2002, respondent’s technical
support manager advised petitioner that his claim for interest
abatement would be denied because there was “no error or delay
relating to the performance of a ministerial act in processing
the examination of your return” and because the IRS could not
consider petitioner’s claims for income tax abatements as part of
a claim for abatement of interest under section 6404. By letter
- 12 -
dated April 22, 2002, petitioner requested reconsideration by
respondent’s Office of Appeals.
On January 9, 2004, respondent sent petitioner a final
determination disallowing petitioner’s request for abatement of
interest for 1987, 1990, 1991.6
In his petition in docket No. 9544-04, petitioner assigns
error as follows to respondent’s refusal of his request for
abatement of interest:
1. The IRS Stoneham, MA office wrongfully witheld my
records after subpoena for nearly 5 years before
returning them to amend/file said returns.
2. If timely returned, the 1988 and 1989 losses could
have be used to eliminate all taxes for 1987, 1990, and
1991.
3. Penalties were assessed unfairly given the
extraordinary family circumstances during the period
which included death of father (1987); death of mother
(1989); daughter becoming total disabled for life;
4. Associate attempting suicide (April, ‘91)
5. 18 year old son - major kidney surgery (emergency)
(1989); and
6. TP being in poor health and under medical care of
MGH for multiple medical problems.* (1987-‘91)
7.*Also not given full credit for $750. per month POA
between 1997-2001.
6
Although petitioner’s Form 843 requested interest
abatement for only 1990, it appears that respondent treated
petitioner’s Form 843 as a request for interest abatement for
1987, 1990, and 1991.
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8. Advised for Tax Court by IRS agent that penalties
nominal and not to be concerned about interest which
was incorrect.
OPINION
A. Burden of Proof
The burden of proof is generally upon petitioner, except as
may be otherwise provided by statute or determined by the Court.
See Rule 142(a). For the first time on reply brief, petitioner
contends, with little elaboration, that respondent has the burden
of proof pursuant to section 7491. Because petitioner did not
raise this argument or position in his pretrial memorandum, at
trial, or on opening brief, respondent has had no opportunity to
address petitioner’s position. Petitioner’s attempt to raise
this argument on reply brief is untimely and prejudicial to
respondent. See Estate of Deputy v. Commissioner, T.C. Memo.
2003-176.
More fundamentally, section 7491 has no applicability to
these consolidated cases.7 Section 7491(a) operates to shift the
burden of proof to the Commissioner in certain circumstances with
7
Moreover, petitioner failed to establish that sec. 7491
was in effect at any time relevant to these cases. Sec. 7491 is
effective with respect to court proceedings arising from
examinations commenced after July 22, 1998. See Internal Revenue
Service Restructuring and Reform Act of 1998, Pub. L. 105-206,
sec. 3001(c)(2), 112 Stat. 727. We question whether the
“examination” in this case commenced after July 22, 1998, as
required for sec. 7491 to apply. It appears obvious that at
least with respect to 1987, 1990, and 1991, the examination
commenced well before July 22, 1998.
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respect to any factual issue relevant to ascertaining the
taxpayer’s liability for tax imposed by subtitle A or B. See
sec. 7491(a)(1); Rule 142(a)(2). In one of these consolidated
cases, petitioner seeks review of respondent’s failure to abate
interest.8 Because interest is not imposed by subtitle A or B
but instead is imposed by section 6601, which is part of subtitle
F, section 7491 does not apply to petitioner’s interest-abatement
claim. See Hawksley v. Commissioner, T.C. Memo. 2000-354, n.13.
In the other consolidated case, petitioner seeks review of
respondent’s collection action but, as discussed infra, is
precluded from challenging his underlying tax liability.
Accordingly, there is before us no legitimate factual issue
relevant to ascertaining petitioner’s liability for tax imposed
by subtitle A or B within the meaning of section 7491(a).9
8
Petitioner also appears to seek abatement of taxes and
penalties under sec. 6404. As discussed more fully infra, we
lack jurisdiction over those claims.
9
Even if we were to assume, for purposes of argument, that
sec. 7491 was in effect for some relevant time and that
petitioner had legitimately raised some factual issue as to which
sec. 7491 might be relevant, petitioner has failed to establish
that he has met the prerequisites for shifting the burden of
proof under sec. 7491(a)(2). See Higbee v. Commissioner, 116
T.C. 438 (2001) (taxpayers bear the burden of proving that the
requirements of sec. 7491 are met). For instance, for the burden
to shift to the Commissioner, the taxpayer must, among other
things, cooperate with reasonable requests by the Commissioner
for “witnesses, information, documents, meetings, and
interviews”. Sec. 7491(a)(2)(B). Petitioner has introduced no
evidence to show that he satisfies this requirement. To the
contrary, the evidence in the record indicates that petitioner
(continued...)
- 15 -
Consequently, the burden of proof remains upon petitioner.
See Rule 142(a).
B. Review of Collection Action
Section 6321 imposes a lien in favor of the United States on
all property and property rights of a person who is liable for
and fails to pay taxes after demand for payment has been made.
The lien arises when assessment is made and continues until the
assessed liability is paid. Sec. 6322. For the lien to be valid
against certain third parties, the Secretary must file a notice
of Federal tax lien; within 5 business days thereafter, the
Secretary must provide written notice to the taxpayer. Secs.
6320(a), 6323(a). The taxpayer may request an administrative
hearing before an Appeals officer. Sec. 6320(b)(1). Once the
Appeals officer issues a determination, the taxpayer may seek
judicial review in the Tax Court or a District Court, as
appropriate. Secs. 6320(c), 6330(d)(1).
Section 6330(c)(2) prescribes the matters that a person may
raise at an Appeals Office hearing, including spousal defenses,
challenges to the appropriateness of the Commissioner’s intended
collection action, and possible alternative means of collection.
The existence or amount of the underlying tax liability may be
contested at an Appeals Office hearing only if the taxpayer did
9
(...continued)
failed to comply fully with respondent’s requests for information
in a timely fashion, even after respondent issued a summons.
- 16 -
not receive a notice of deficiency or did not otherwise have an
opportunity to dispute that tax liability. Sec. 6330(c)(2)(B);
see Sego v. Commissioner, 114 T.C. 604, 609 (2000); Goza v.
Commissioner, 114 T.C. 176, 180-181 (2000).
If the validity of the underlying tax liability is properly
at issue, we review that issue de novo. See Sego v.
Commissioner, supra at 609-610. Other issues we review for abuse
of discretion. Id.
1. Underlying Tax Liability
Petitioner challenges his underlying liabilities for 1987,
1990, and 1991 on the ground that alleged net operating loss
carrybacks and carryforwards from 1988 and 1989 should eliminate
any liabilities for these years. Because petitioner received a
notice of deficiency for his tax years 1987 through 1991, he is
not entitled to challenge the existence or amount of his tax
liabilities for these years in this collection proceeding. See
secs. 6320(c), 6330(c)(2)(B); Sego v. Commissioner, supra at 609;
Goza v. Commissioner, supra at 180-181. Moreover, because this
Court adjudicated petitioner’s liabilities for these years
pursuant to a stipulated decision in the prior deficiency
proceeding, the doctrine of res judicata prevents petitioner from
relitigating in this proceeding his liabilities for 1987, 1990,
and 1991. See Newstat v. Commissioner, T.C. Memo. 2004-208.
- 17 -
2. Application of Installment Payments
Petitioner alleges that for some months he made monthly
installment payments of $750 each; he has been vague and
inconsistent in describing the total amount of installment
payments he claims to have made.10 Nevertheless, petitioner
argues on brief that if his installment payments to the IRS had
been correctly credited to his account, he would have no
outstanding balance due for any year relevant to these cases. He
contends that respondent erred in failing to follow “standard
accounting practices” so as to apply his payments “to the oldest
principal balance first”.
Petitioner has failed to establish that respondent committed
error in this regard. The record indicates that at least some of
petitioner’s installment payments were made before March 13,
2000, when petitioner’s 1987, 1990, and 1991 liabilities became
subject to an installment agreement. Clearly, respondent did not
err by applying these pre-March 13, 2000, installment payments to
years other than 1987, 1990, and 1991. Respondent’s records
indicate that ultimately petitioner received credit for 31
payments of approximately $750 each, some of which were in fact
10
In his petition filed in docket No. 24528-04L, petitioner
alleges that his installment payments totaled $27,000. In his
pretrial memorandum, petitioner states that he made installment
payments totaling “more than $24,000”. On opening brief,
petitioner asserts that his installment payments totaled $29,503.
On reply brief, petitioner asserts that his installment payments
were “$27,000. plus”.
- 18 -
credited against petitioner’s 1987 liability. The record
contains no credible evidence to suggest that these installment
payments were improperly credited or that petitioner made
additional payments that were not credited.
3. Collection Alternatives
Petitioner has not expressly assigned error to the
settlement officer’s rejection of his offer-in-compromise. To
the extent that the petition might be construed to raise such a
claim by implication, we hold that the settlement officer did not
abuse her discretion in rejecting petitioner’s offer-in-
compromise, inasmuch as petitioner was not entitled to challenge
his underlying tax liabilities for 1987, 1990, and 1991, see sec.
301.7122-1(b)(1), Proced. & Admin. Regs.; failed to timely comply
with the settlement officer’s requests for complete current
financial information to establish doubt as to collectibility or
economic hardship, see sec. 301.7122-1(b)(2) and (3), Proced. &
Admin. Regs.; failed to submit a copy of his 2003 tax return to
show the settlement officer that he was in current compliance
with filing requirements, see Rodriguez v. Commissioner, T.C.
Memo. 2003-153; and altered the standard terms of Form 656 so as
to delete the statement that he was signing the form under
penalties of perjury, see Rev. Proc. 2003-71, sec. 4.01, 2003-2
C.B. 517 (Form 656 must be signed under penalty of perjury and
none of its standard terms may be stricken or altered).
- 19 -
4. Conclusion
Petitioner has failed to make a valid challenge to the
appropriateness of respondent’s collection action.
C. Request for Abatement of Interest
In his petition, petitioner requests us to abate all
interest and penalties for 1987, 1990, and 1991.11
Section 6404(e)(1) provides that the Commissioner may abate
interest on any deficiency or payment of income, gift, estate,
and certain excise taxes to the extent that the deficiency or any
error or delay in payment is attributable to erroneous or
dilatory performance of a ministerial act by an officer or
employee of the Commissioner.12 Such an error or delay in
11
On brief, petitioner seems to suggest that he is also
requesting abatement of income tax for 1987, 1990, and 1991 and
may be requesting abatement of interest, taxes, and penalties for
other years as well. We decline to consider these issues raised
for the first time on brief, for to do so would result in
surprise and prejudice to respondent. See Sundstrand Corp. v.
Commissioner, 96 T.C. 226, 346-347 (1991); Seligman v.
Commissioner, 84 T.C. 191, 198 (1985), affd. 796 F.2d 116 (5th
Cir. 1986). In any event, in the administrative proceeding,
petitioner did not seek interest abatement for years other than
1987, 1990, and 1991; in this proceeding, petitioner has alleged
no facts or legal basis to support any claim for abatement of
interest for years other than 1987, 1990, and 1991. As discussed
infra, review of petitioner’s challenge to taxes and penalties is
precluded in these cases.
12
In 1996, sec. 6404(e) was amended to permit abatement of
interest for “unreasonable” error or delay resulting from the
performance of ministerial or “managerial” acts. Taxpayer Bill
of Rights 2, Pub. L. 104-168, sec. 301(a)(1) and (2), 110 Stat.
1457 (1996). The amended provision applies to tax years
beginning after July 30, 1996. Id. sec. 301(c). As previously
(continued...)
- 20 -
performing a ministerial act is taken into account only if it is
in no significant aspect attributable to the taxpayer, and only
if it occurs after the IRS has contacted the taxpayer in writing
regarding the deficiency or payment.
Section 6404(e) is not intended to be “used routinely to
avoid payment of interest” but rather is to be “utilized in
instances 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. (Vol. 3) 1, 208.
1. Jurisdiction
We have jurisdiction to decide whether respondent’s failure
to abate interest under section 6404(e) was an abuse of
discretion. See sec. 6404(h). Review of petitioner’s challenge
to his underlying liability for taxes and penalties is precluded
in these cases, if not by the limitations of section 6404(h),
which gives the Tax Court jurisdiction only with respect to
claims for abatement of interest, see Krugman v. Commissioner,
112 T.C. 230, 237 (1999), then, as previously discussed, by
12
(...continued)
discussed, in neither the administrative proceeding nor this
proceeding has petitioner properly challenged respondent’s
failure to abate interest for years other than 1987, 1990, and
1991. Therefore, the amendment is inapplicable to the instant
cases. We intend no inference that we would reach a different
result in these cases if the amendment were applicable.
- 21 -
virtue of the doctrine of res judicata and the operation of
section 6330(c)(2)(b).
2. Ministerial Error
Petitioner has failed to show error or delay by respondent’s
officers or employees in performing a ministerial act within the
meaning of section 6404(e). A “ministerial act” means a
procedural or mechanical act that does not involve the exercise
of judgment or discretion and occurs during the processing of a
taxpayer’s case after all the prerequisites to the act, such as
conferences and review by supervisors, have taken place. See
Corson v. Commissioner, 123 T.C. 202, 207 (2004); sec. 301.6404-
2T, Temporary Proced. & Admin. Regs., 52 Fed. Reg. 30163 (Aug.
13, 1987). The exercise of judgment or discretion, such as the
Commissioner’s deliberation concerning the proper application of
Federal tax law or other law, is not a ministerial act. Corson
v. Commissioner, supra.
Petitioner alleges that respondent’s Stoneham,
Massachusetts, office wrongfully “withheld” his records for
nearly 5 years after obtaining them by summons. The mere passage
of time in such circumstances, however, does not establish
erroneous or dilatory ministerial acts by respondent. See Hanks
v. Commissioner, T.C. Memo. 2001-319.
It was not until 1996 that petitioner finally submitted his
delinquent returns for 1987 through 1991. Relatively soon
- 22 -
thereafter, respondent issued petitioner a 30-day letter,
proposing adjustments. Petitioner filed an administrative
appeal, and after the notice of deficiency was issued in 1998,
petitioner litigated the deficiency in the Tax Court. That
litigation concluded in 1999; petitioner then entered into an
installment agreement with the IRS. In 2002, petitioner stopped
making installment payments. In these circumstances, we discern
no error or delay by respondent’s officers or employees in
performing a ministerial act.
Petitioner alleges that respondent failed to give him proper
credit for installment payments made. As previously discussed,
we find petitioner’s contentions in this regard to be unfounded.
In any event, respondent’s decision in this case to apply
payments to a particular year’s tax liability does not constitute
a ministerial act within the meaning of section 6404(e). See
Boyd v. Commissioner, T.C. Memo. 2000-16.
3. Significant Aspects of Delay Attributable to Petitioner
Moreover, even if we were to assume, for the sake of
argument, that respondent’s officers or employees improperly
delayed performing (or failed to perform) one or more prescribed
ministerial acts, we would nevertheless conclude that significant
aspects of any such failure were attributable to petitioner, so
as to preclude relief under section 6404(e). It was petitioner’s
own fault that he failed to file returns for 1987 through 1991,
- 23 -
forcing respondent to take action to secure the filing of the
returns. Because of petitioner’s lack of cooperation, respondent
eventually resorted to summoning petitioner’s records. As
previously noted, it was not until 1996 that petitioner finally
submitted his delinquent returns for 1987 through 1991. Notably,
petitioner’s accompanying cover letter attributed the late
submission to his health problems rather than to any error or
delay by respondent’s employees; petitioner’s letter thanked the
IRS agents for their “professionalism and patience”.
In sum, petitioner has not shown that respondent abused his
discretion in failing to comply with petitioner’s request for
interest abatement.
We have considered all arguments made by petitioner and have
found those arguments not discussed herein to be moot or without
merit.13
To reflect the foregoing,
Decisions will be entered
for respondent.
13
Although petitioner alleges in his petition that an IRS
agent advised him not to be concerned about interest, which was
“incorrect”, petitioner has not expressly raised this issue at
trial or on brief. We deem petitioner to have abandoned any such
issue. In any event, the record contains no evidence
corroborating this claim.