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federal tax law (or other federal or state law) is not a

•

You filed a request for abatement of interest (Form

ministerial act.

843) with the IRS after July 30,1996.

•

Example 1. You move from one state to another before

The IRS has mailed you a notice of final determina-

the IRS selects your tax return for examination. A letter

tion or a notice of disallowance.

stating that your return has been selected is sent to your

•

You file a petition with the Tax Court within 180 days

old address and then forwarded to your new address.

of the mailing of the notice of final determination or

When you get the letter, you respond with a request that

the notice of disallowance.

the examination be transferred to the area office closest to

your new address. The examination group manager ap-

The following requirements must also be met.

proves your request. After your request has been ap-

•

proved, the transfer is a ministerial act. The IRS can

For individual and estate taxpayers — your net

reduce the interest because of any unreasonable delay in

worth must not exceed $2 million as of the filing date

transferring the case.

of your petition for review. For this purpose, individu-

als filing a joint return shall be treated as separate

Example 2. An examination of your return reveals tax

individuals.

due for which a notice of deficiency (90-day letter) will be

•

For charities and certain cooperatives — you must

issued. After you and the IRS discuss the issues, the

not have more than 500 employees as of the filing

notice is prepared and reviewed. After the review process,

date of your petition for review.

issuing the notice of deficiency is a ministerial act. If there

•

is an unreasonable delay in sending the notice of defi-

For all other taxpayers — your net worth must not

ciency to you, the IRS can reduce the interest resulting

exceed $7 million, and you must not have more than

from the delay.

500 employees as of the filing date of your petition

for review.

Managerial act. This is an administrative act during the

processing of a case that involves the loss of records or the

exercise of judgment or discretion concerning the manage-

Abatement of Interest for

ment of personnel. A decision concerning the proper appli-

cation of federal tax law (or other federal or state law) is not

Individuals Affected by

a managerial act.

Presidentially Declared Disasters

or Military or Terrorist Actions

Example. A revenue agent is examining your tax re-

turn. During the middle of the examination, the agent is

If you are (or were) affected by a Presidentially declared

sent to an extended training course. The agent’s supervi-

disaster occurring after 1996 or a terrorist or military action

sor decides not to reassign your case, so the work is

occurring after September 10, 2001, the IRS may abate

unreasonably delayed until the agent returns. Interest from

the unreasonable delay can be abated since both the

(reduce) the amount of interest you owe on certain taxes.

The IRS may abate interest for the period of any additional

decision to send the agent to the training class and not to

reassign the case are managerial acts.

time to file or pay that the IRS provides on account of the

disaster or the terrorist or military action. The IRS will issue

How to request abatement of interest. You request an

a notice or news release indicating who are affected tax-

abatement (reduction) of interest on Form 843. You should

payers and stating the period of relief.

file the claim with the IRS service center where you filed

If you are eligible for relief from interest, but were

the tax return that was affected by the error or delay.

charged interest for the period of relief, the IRS may retro-

If you have already paid the interest and you would like

actively abate your interest. To the extent possible, the IRS

a credit or refund of interest paid, you must file Form 843

can take the following actions.

within 3 years from the date you filed your original return or

•

2 years from the date you paid the interest, whichever is

Make appropriate adjustments to your account.

later. If you have not paid any of the interest, these time

•

Notify you when the adjustments are made.

limitations for filing Form 843 do not apply.

•

Generally, you should file a separate Form 843 for each

Refund any interest paid by you where appropriate.

tax period and each type of tax. However, complete only

one Form 843 if the interest is from an IRS error or delay

For more information on disaster area losses, see Disas-

that affected your tax for more than one tax period or for

ter Area Losses in Publication 547. For more information

more than one type of tax (for example, where two or more

on other tax relief for victims of terrorist attacks, see Publi-

tax years were being examined). You do not have to figure

cation 3920.

the dollar amounts of interest that you want lowered.

If your request for abatement of interest is denied, you

Offer in Compromise

can appeal the decision to the IRS Appeals Office.

Tax Court can review failure to abate interest. The

In certain circumstances, the IRS will allow you to pay less

than the full amount you owe. If you think you may qualify,

Tax Court can review the IRS’ refusal to abate (reduce)

interest if all of the following requirements are met.

you should submit your offer by filing Form 656, Offer in

Page 7

Publication 556 (Rev. August 2005) - Examination Of Returns, Appeal Rights,and Claims For Refund Page 7

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