King v. Commissioner of Internal Revenue

Tax Ct. erred in granting taxpayer’s petition to abate certain interest payments IRS assessed on plaintiff’s late payment of quarterly payroll taxes, even though taxpayer alleged that: (1) IRS initially told him that it was willing to allow him ability to pay said taxes in installment payments; (2) IRS subsequently reversed itself on agreement to allow him to make installment payments; and (3) interest assessed after IRS’s initial agreement to allow installment payments would be “excessive.” While Tax Ct. believed that instant interest assessment fit definition of “excessive” because said assessment was “unfair” in light of IRS’s conduct towards taxpayer, Ct. of Appeals found that Tax Ct. could not properly consider concept of “fairness” when considering taxpayer’s petition, where such concept was vague and was outside definition of “excessive” as that term is used in 26 CFR section 301.6404-1(a), which was defined to mean “payments that are in excess of tax liability.” Ct. further observed that there was no evidence indicating that IRS’s assessment of disputed interest payments was in excess of any tax liability.