Tax Court in Brief | Porter v. Commissioner | Claim for Abatement of Interest

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The Tax Court in Brief – March 28th – April 1st, 2022

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Tax Litigation:  The Week of March 28, 2022, through April 1, 2022

Porter v. Comm’r, T.C. Memo. 2022-25 | March 28, 2022 |Greaves, J. | Dkt. No. 3544-21

Short Summary: Taxpayer, Jeremy Porter (“Porter”) claimed abatement of interest on his 2011 and 2012 federal income tax deficiencies that were determined on May 13, 2014. The deficiency case languished in the litigation phase, and ultimately the IRS and Porter settled the case by a stipulated decision entered May 29, 2019.  Porter then filed Forms 843, Claim for Refund and Request for Abatement, seeking abatement of interest that accrued on the deficiencies. Porter alleged that the underlying case would have settled on the same terms and much sooner but for IRS delay in responding to settlement communications from Porter and by continuances granted at the IRS’s request. The reviewing agent found that Porter also caused delays and that Porter agreed to the continuances. Thus, the abatement was denied. Porter petitioned the Tax Court to review that denial.

Primary Holdings:

Key Points of Law:

Insights: A taxpayer may be entitled to an abatement of interest if, through the underlying proceeding, unreasonable error or delay in payment is attributable to the IRS being erroneous or dilatory in performing a ministerial or managerial act. However, such an error or delay is taken into account only if no significant aspect of such error or delay can be attributed to the taxpayer. Attribution can occur where, for example, the taxpayer fails to timely deliver records requested by the IRS or where the taxpayer agrees to continuances in the litigation phase of a deficiency matter. The taxpayer should evaluate whether or not an agreement to a continuance will later affect the taxpayer’s right to seek an abatement of interest that will accrue because of the continuance. A reservation of rights and other strategy might be employed to ensure that an acquiescence to a continuance does not disadvantage the taxpayer later.

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