MEMORANDUM FINDINGS OF FACT AND OPINION
HAINES,
FINDINGS OF FACT
Some of the facts have been stipulated and are so found. The stipulation of facts and the supplemental stipulation of facts, together with the attached exhibits, are incorporated herein by this reference. At the time petitioners filed their petition, they resided in the 2009 Tax Ct. Memo LEXIS 150">*151 State of Washington.
Petitioners timely filed Forms 1040, U.S. Individual Income Tax Return, for 1998 and 1999.
On May 18, 2000, respondent sent a letter to petitioners notifying them that their 1998 return had been selected for examination. On March 2, 2001, respondent issued a notice of deficiency with respect to petitioners' 1998 return. Petitioners did not petition this Court in response to the notice of deficiency.
On March 22, 2001, respondent sent a letter to petitioners notifying them that their 1999 return had been selected for examination. On December 12, 2001, respondent issued a notice of deficiency with respect to petitioners' 1999 return.
Rather than petition this Court in response to the notice of deficiency, petitioner Jack M. Chakoian, II (Mr. Chakoian) called respondent on March 4, 2002, and requested that the case be transferred from Chicago, Illinois, to Seattle, Washington. Respondent informed Mr. Chakoian that the case could not be transferred during the 90-day statutory period when petitioners could file a petition with the Tax Court.
On April 2, 2002, petitioners submitted an offer-in-compromise (OIC) based on doubt 2009 Tax Ct. Memo LEXIS 150">*152 as to liability. Respondent's witness, IRS Interest Abatement Coordinator Tom Poppe (Mr. Poppe), testified at trial that the IRS office in charge of processing OICs based on doubt as to liability was "inundated with offers at the time." He also testified that OICs based on doubt as to liability were considered low-priority cases, so it was "unfortunately typical for offers in compromise not to be worked for two or three years". Because of the backlog of OICs already filed with the Internal Revenue Service (IRS), petitioners' OIC was not assigned to a tax examiner until March 4, 2004. On March 9, 2004, respondent notified petitioners that their OIC would be rejected. On June 4, 2004, respondent sent an official rejection memorandum to petitioners.
On July 7, 2004, petitioners requested a conference with the IRS Appeals Office. On September 21, 2004, and February 16, 2005, Appeals Officer Jeffrey Sherrill held appeals conferences with petitioners. On July 25, 2005, the Appeals Office mailed petitioners a letter rejecting their OIC but allowing them to reduce their 1999 liability by $ 2,889 and their 1999
On November 21, 2006, petitioners 2009 Tax Ct. Memo LEXIS 150">*153 submitted requests for abatement of interest to the IRS and sent copies of the requests to the Taxpayer Advocate in Seattle, Washington. Respondent assigned the interest abatement case to Mr. Poppe. On December 22, 2006, Mr. Poppe completed a 12-page analysis of petitioners' requests entitled "Interest and Penalty Abatement Case Details." The analysis concluded that respondent should deny petitioners' interest abatement request because respondent had followed all established administrative procedures for processing petitioners' OIC.
On February 2, 2007, Mr. Chakoian sent a letter to Mr. Poppe indicating that Mr. Chakoian had previously received a letter from Mr. Poppe which articulated respondent's intent to deny petitioners' request. Mr. Chakoian argued in his letter that petitioners were entitled to interest abatement because a call center employee of respondent had instructed petitioners to submit an OIC in order to move the case from Chicago to Seattle.
On March 7, 2007, petitioners' interest abatement case was assigned to Appeals. On March 9, 2007, Appeals declined petitioners' request for interest abatement but allowed a partial
On June 7, 2007, the Office of Appeals in Sacramento, California, sent petitioners a notice entitled "Full Disallowance -- Final Determination" (final determination) in response to petitioners' request for abatement of interest. The final determination did not explain the reasons for respondent's denial of petitioners' request. The pertinent part of the final determination stated: We regret that our final determination is to deny your request for an abatement of interest. We had to deny your request for the following reason(s): If you disagree with our denial of your claim for an abatement of interest, and you meet the eligibility requirements described below, you may request a review of our denial in the United States Tax Court.
On September 4, 2007, petitioners filed a petition for review of respondent's failure to abate interest under
OPINION
We review the Commissioner's determination not to abate interest for abuse of discretion.
The Court has jurisdiction to review the record in the instant case to determine whether to sustain respondent's denial of relief. See
Petitioners first contend that they were induced to file an OIC upon the oral advice of one of respondent's call center employees. Petitioners were unable to specify the name of this employee or the date of their conversation. In any case, furnishing such oral advice does not constitute an erroneous performance of a managerial or ministerial act under
Petitioners also claim that respondent committed a managerial act that resulted in an unreasonable delay by failing to process petitioners' OIC from April 2, 2002, through March 4, 2004. From our review of the record, respondent was not dilatory 2009 Tax Ct. Memo LEXIS 150">*157 in performing a managerial act. Although the decision to give petitioners' OIC low-priority status constituted a managerial act, respondent's decision did not lead to an unreasonable error or delay under the facts of this case. Petitioners do not allege, and the record does not show, that respondent deviated from standard IRS procedures in processing petitioners' OIC. See
Petitioners' arguments do not rise to the level the statute requires for relief. See
In reaching our holding herein, we have considered all arguments made, and, to the extent not mentioned above, we conclude that they are moot, irrelevant, or without merit.
To reflect the foregoing,
1. Unless otherwise indicated, all section references are to the Internal Revenue Code, as amended. Amounts are rounded to the nearest dollar.↩
2. Petitioners concede that they are not entitled to abatement of interest for periods beginning before Mar. 4, 2002. Petitioners also concede that they are not entitled to abatement of interest with respect to their 2003 Federal income tax liability.↩
3. Congress has taken steps to safeguard against unreasonable delays in the processing of OICs by enacting the Tax Increase Prevention and Reconciliation Act of 2005,
4. Petitioners also sought at trial to raise substantiation issues with regard to business expenses. As this is an interest abatement case, we cannot adjudicate substantiation issues. See
5. Respondent reduced petitioners' 1999 liability by $ 2,889 and their 1999
