Bloomberg Bloomberg
Comprehensive Tax Research. Practitioner to Practitioner. ®

Internal Revenue Code, § 6404. Abatements

I.R.C. § 6404(a) General Rule
The Secretary is authorized to abate the unpaid portion of the assessment of any tax or any liability in respect thereof, which—
I.R.C. § 6404(a)(1)
is excessive in amount, or
I.R.C. § 6404(a)(2)
is assessed after the expiration of the period of limitation properly applicable thereto, or
I.R.C. § 6404(a)(3)
is erroneously or illegally assessed.
I.R.C. § 6404(b) No Claim For Abatement Of Income, Estate, And Gift Taxes
No claim for abatement shall be filed by a taxpayer in respect of any assessment of any tax imposed under subtitle A or B.
I.R.C. § 6404(c) Small Tax Balances
The Secretary is authorized to abate the unpaid portion of the assessment of any tax, or any liability in respect thereof, if the Secretary determines under uniform rules prescribed by the Secretary that the administration and collection costs involved would not warrant collection of the amount due.
I.R.C. § 6404(d) Assessments Attributable To Certain Mathematical Errors By Internal Revenue Service
In the case of an assessment of any tax imposed by chapter 1 attributable in whole or in part to a mathematical error described in section 6213(g)(2)(A), if the return was prepared by an officer or employee of the Internal Revenue Service acting in his official capacity to provide assistance to taxpayers in the preparation of income tax returns, the Secretary is authorized to abate the assessment of all or any part of any interest on such deficiency for any period ending on or before the 30th day following the date of notice and demand by the Secretary for payment of the deficiency.
I.R.C. § 6404(e) Abatement Of Interest Attributable To Unreasonable Errors And Delays By Internal Revenue Service
I.R.C. § 6404(e)(1) In General
In the case of any assessment of interest on—
I.R.C. § 6404(e)(1)(A)
any deficiency attributable in whole or in part to any unreasonable error or delay by an officer or employee of the Internal Revenue Service (acting in his official capacity) in performing a ministerial or managerial act, or
I.R.C. § 6404(e)(1)(B)
any payment of any tax described in section 6212(a) to the extent that any unreasonable error or delay in such payment is attributable to such an officer or employee being erroneous or dilatory in performing a ministerial or managerial act,
the Secretary may abate the assessment of all or any part of such interest for any period. For purposes of the preceding sentence, an error or delay shall be taken into account only if no significant aspect of such error or delay can be attributed to the taxpayer involved, and after the Internal Revenue Service has contacted the taxpayer in writing with respect to such deficiency or payment.
I.R.C. § 6404(e)(2) Interest Abated With Respect To Erroneous Refund Check
The Secretary shall abate the assessment of all interest on any erroneous refund under section 6602 until the date demand for repayment is made, unless—
I.R.C. § 6404(e)(2)(A)
the taxpayer (or a related party) has in any way caused such erroneous refund, or
I.R.C. § 6404(e)(2)(B)
such erroneous refund exceeds $50,000.
I.R.C. § 6404(f) Abatement Of Any Penalty Or Addition To Tax Attributable To Erroneous Written Advice By The Internal Revenue Service
I.R.C. § 6404(f)(1) In General
The Secretary shall abate any portion of any penalty or addition to tax attributable to erroneous advice furnished to the taxpayer in writing by an officer or employee of the Internal Revenue Service, acting in such officer's or employee's official capacity.
I.R.C. § 6404(f)(2) Limitations
Paragraph (1) shall apply only if—
I.R.C. § 6404(f)(2)(A)
the written advice was reasonably relied upon by the taxpayer and was in response to a specific written request of the taxpayer, and
I.R.C. § 6404(f)(2)(B)
the portion of the penalty or addition to tax did not result from a failure by the taxpayer to provide adequate or accurate information.
I.R.C. § 6404(g) Suspension Of Interest And Certain Penalties Where Secretary Fails To Contact Taxpayer
I.R.C. § 6404(g)(1) Suspension
I.R.C. § 6404(g)(1)(A) In General
In the case of an individual who files a return of tax imposed by subtitle A for a taxable year on or before the due date for the return (including extensions), if the Secretary does not provide a notice to the taxpayer specifically stating the taxpayer's liability and the basis for the liability before the close of the 36-month period beginning on the later of—
I.R.C. § 6404(g)(1)(A)(i)
the date on which the return is filed; or
I.R.C. § 6404(g)(1)(A)(ii)
the due date of the return without regard to extensions, the Secretary shall suspend the imposition of any interest, penalty, addition to tax, or additional amount with respect to any failure relating to the return which is computed by reference to the period of time the failure continues to exist and which is properly allocable to the suspension period.
I.R.C. § 6404(g)(1)(B) Separate Application
This paragraph shall be applied separately with respect to each item or adjustment.
If, after the return for a taxable year is filed, the taxpayer provides to the Secretary 1 or more signed written documents showing that the taxpayer owes an additional amount of tax for the taxable year, clause (i) shall be applied by substituting the date the last of the documents was provided for the date on which the return is filed.
I.R.C. § 6404(g)(2) Exceptions
Paragraph (1) shall not apply to—
I.R.C. § 6404(g)(2)(A)
any penalty imposed by section 6651;
I.R.C. § 6404(g)(2)(B)
any interest, penalty, addition to tax, or additional amount in a case involving fraud;
I.R.C. § 6404(g)(2)(C)
any interest, penalty, addition to tax, or additional amount with respect to any tax liability shown on the return;
I.R.C. § 6404(g)(2)(D)
any interest, penalty, addition to tax, or additional amount with respect to any gross misstatement;
I.R.C. § 6404(g)(2)(E)
any interest, penalty, addition to tax, or additional amount with respect to any reportable transaction with respect to which the requirement of section 6664(d)(3)(A) is not met and any listed transaction (as defined in 6707A(c)); or
I.R.C. § 6404(g)(2)(F)
any criminal penalty.
I.R.C. § 6404(g)(3) Suspension Period
For purposes of this subsection, the term “suspension period” means the period—
I.R.C. § 6404(g)(3)(A)
beginning on the day after the close of the 36-month period under paragraph (1); and
I.R.C. § 6404(g)(3)(B)
ending on the date which is 21 days after the date on which notice described in paragraph (1)(A) is provided by the Secretary.
I.R.C. § 6404(h) Judicial Review Of Request For Abatement Of Interest
I.R.C. § 6404(h)(1) In General
The Tax Court shall have jurisdiction over any action brought by a taxpayer who meets the requirements referred to in section 7430(c)(4)(A)(ii) to determine whether the Secretary's failure to abate interest under this section was an abuse of discretion, and may order an abatement, if such action is brought—
I.R.C. § 6404(h)(1)(A)
at any time after the earlier of—
I.R.C. § 6404(h)(1)(A)(i)
the date of the mailing of the Secretary's final determination not to abate such interest, or
I.R.C. § 6404(h)(1)(A)(ii)
the date which is 180 days after the date of the filing with the Secretary (in such form as the Secretary may prescribe) of a claim for abatement under this section, and
I.R.C. § 6404(h)(1)(B)
not later than the date which is 180 days after the date described in subparagraph (A)(i).
I.R.C. § 6404(h)(2) Special Rules
I.R.C. § 6404(h)(2)(A) Date Of Mailing
Rules similar to the rules of section 6213 shall apply for purposes of determining the date of the mailing referred to in paragraph (1).
I.R.C. § 6404(h)(2)(B) Relief
Rules similar to the rules of section 6512(b) shall apply for purposes of this subsection.
I.R.C. § 6404(h)(2)(C) Review
An order of the Tax Court under this subsection shall be reviewable in the same manner as a decision of the Tax Court, but only with respect to the matters determined in such order.
I.R.C. § 6404(i) Cross Reference
For authority to suspend running of interest, etc. by reason of Presidentially declared disaster or terroristic or military action, see section 7508A.
(Aug. 16, 1954, ch. 736, 68A Stat. 792; Oct. 4, 1976, Pub. L. 94-455, title XII, 1212(a), title XIX, 1906(b)(13)(A), 90 Stat. 1712, 1834; Dec. 24, 1980, Pub. L. 96-589, 6(b)(2), 94 Stat. 3407; Oct. 22, 1986, Pub. L. 99-514, title XV, 1563(a), 100 Stat. 2762; Nov. 10, 1988, Pub. L. 100-647, title I, 1015(n), title VI, 6229(a), 102 Stat. 3572, 3733; Pub. L. 105-206, title III, Secs. 3305(a), 3309(a), July 22, 1998, 112 Stat 685; Pub. L. 105-277, title IV, Sec. 4003(e)(2), Oct. 21, 1998, 112 Stat 2681; Pub. L. 107-134, title I, Sec. 112(d)(1), Jan. 23, 2002, 115 Stat. 2427; Pub. L. 108-357, title VIII, Sec. 903(a), (b), (c), Oct. 22, 2004, 118 Stat. 1418; Pub. L. 109-135, title III, Sec. 303(b)(1), Dec. 21, 2005, 119 Stat. 2577; Pub. L. 110-28, title VIII, Sec. 8242(a), May 25, 2007, 121 Stat. 112; Pub. L. 113-295, Div. A, title II, Sec. 221(a)(111), Dec. 19, 2014, 128 Stat. 4010; Pub. L. 114-113, Div. Q, title IV, Sec. 421(a), Dec. 18, 2015; Pub. L. 115-141, Div. U, title IV, Sec. 401(a)(288), Mar. 23, 2018, 132 Stat. 348.)
BACKGROUND NOTES
AMENDMENTS
2018 - Subsec. (g)(2)(E). Pub. L. 115-141, Div. U, Sec. 401(a)(288), amended subpar. (E) by substituting “section 6664(d)(3)(A)” for “section 6664(d)(2)(A)”.
2015 - Subsec. (h). Pub. L. 114-113, Div. Q, Sec. 421(a), amended the heading of subsec. (h) by substituting “JUDICIAL REVIEW” for “REVIEW OF DENIAL”.
Subsec. (h). Pub. L. 114-113, Div. Q, Sec. 421(a)(2), amended subsec. (h) by striking “if such action is brought within 180 days after the date of the mailing of the Secretary's final determination not to abate such interest.” and inserting “if such action is brought—“ and subpar. (A) and (B).
2014 - Subsec. (f)(3). Pub. L. 113-295, Div. A, Sec. 221(a)(111), struck subsec. (3). Prior to being struck it read as follows:
“(3) Initial Regulations.—Within 180 days after the date of the enactment of this subsection, the Secretary shall prescribe such initial regulations as may be necessary to carry out this subsection.”
2007 - Subsec. (g)(1)(A). Pub. L. 110-28, Sec. 8242(a), amended subpar. (A) by substituting “36-month period” for “18-month period”.
Subsec. (g)(3)(A). Pub. L. 110-28, Sec. 8242(a), amended subpar. (A) by substituting “36-month period” for “18-month period”.
2005 - Subsec. (g)(1). Pub. L. 109-135, Sec. 303(b)(1), amended par. (1) by adding the sentence at the end.
2004 -Subsec. (g). Pub. L. 108-357, Sec. 903(a), substituted “18-month period” for “1-year period (18-month period in the case of taxable years beginning before January 1, 2004)” each place it appeared.
Subsec. (g)(2)(C)-(E). Pub. L. 108-357, Sec. 903(b), struck “or” at the end of subpar. (C); redesignating subpar. (D) as (E); and inserting new subpar. (D).
Formerly Subpar. (D) read: “(D) any criminal penalty.”
2004 - Subsec. (g)(2)(D)-(F). Pub. L. 108-357, Sec. 903(c), as amended by subsec. 903(b) of Pub. L. 108-357, struck “or” at the end of subpar. (D); redesignated subpar. (E) as (F); and inserting new supar. (E).
2002—Subsec. (h). Pub. L. 107-134, Sec. 112(d)(1), struck subsec. (h). Prior to being struck, it read as follows:
“(h) Abatement of Interest on Underpayments by Taxpayers in Presidentially Declared Disaster Areas. --
“(1) In general.--If the Secretary extends for any period the time for filing income tax returns under section 6081 and the time for paying income tax with respect to such returns under section 6161 for any taxpayer located in a Presidentially declared disaster area, the Secretary shall abate for such period the assessment of any interest prescribed under section 6601 on such income tax.
“(2) Presidentially declared disaster area.--For purposes of paragraph (1), the term ‘Presidentially declared disaster area’ means, with respect to any taxpayer, any area which the President has determined warrants assistance by the Federal Government under the Robert T. Stafford Disaster Relief and Emergency Assistance Act.”
Subsec. (i). Pub. L. 107-134, Sec. 112(d)(1), redesignated subsec. (i) as subsec. (h) and added a new subsec. (i).
1998--Subsec. (h)(2). Pub. L. 105-277, Sec. 4003(e)(2), amended par. (2) by inserting “Robert T. Stafford” before “Disaster”.
Subsec. (g), (h). Pub. L. 105-206, Sec. 3305(a) redesignated subsec. (g) as (h) and added new subsec. (g).
Subsec. (h), (i). Pub. L. 105-206, Sec. 3309(a) redesignated subsec. (h) as (i) and added new subsec. (h).
1996--Subsec. (e). Pub. L. 104-168, 301(b), substituted “Abatements” for “Assessments” and inserted “unreasonable” before “error” in the heading.
Subsec. (e)(1). Pub. L. 104-168, 301(a), inserted “unreasonable” before “error” and “substituted “in performing a ministerial or managerial act” for “in performing a ministerial act” each time it appeared.
Subsec. (g). Pub. L. 104-168, 302(a), added subsec. (g).
1988--Subsec. (e)(1)(B). Pub. L. 100-647, 1015(n), inserted “error or” before “delay” and “erroneous or” before “dilatory”.
Subsec. (f). Pub. L. 100-647, 6229(a), added subsec. (f).
1986--Subsec. (e). Pub. L. 99-514 added subsec. (e).
1980--Subsec. (d). Pub. L. 96-589 substituted “section 6213(g)(2)(A)” for “section 6213(f)(2)(A)”.
1976--Subsecs. (a), (c). Pub. L. 94-455, 1906(b)(13)(A), struck out “or his delegate” after “Secretary” wherever appearing.
Subsec. (d). Pub. L. 94-455, 1212(a), added subsec. (d).
EFFECTIVE DATE OF 2018 AMENDMENT
Amendment by Pub. L. 115-141, Div. U, Sec. 401(a)(288), effective March 23, 2018.
EFFECTIVE DATE OF 2015 AMENDMENTS
Amendments by Pub. L. 114-113, Div. Q, Sec. 421(a), effective for claims for abatement of interest filed with the Secretary of the Treasury after the date of enactment of this Act [Enacted: Dec. 18, 2015].
EFFECTIVE DATE OF 2014 AMENDMENT
Amendment by Pub. L. 113-295, Sec. 221(a)(111), applicable on the date of enactment of this Act [Enacted: Dec. 19, 2014].
Section 221(b)(2) of Pub. L. 113-295, Div. A, provided the following Savings Provision:
“(2) SAVINGS PROVISION.—If—
“(A) any provision amended or repealed by the amendments made by this section applied to—
“(i) any transaction occurring before the date of the enactment of this Act [Enacted: Dec. 19, 2014],
“(ii) any property acquired before such date of enactment, or
“(iii) any item of income, loss, deduction, or credit taken into account before such date of enactment, and
“(B) the treatment of such transaction, property, or item under such provision would (without regard to the amendments or repeals made by this section) affect the liability for tax for periods ending after date of enactment, nothing in the amendments or repeals made by this section shall be construed to affect the treatment of such transaction, property, or item for purposes of determining liability for tax for periods ending after such date of enactment.”
EFFECTIVE DATE OF 2007 AMENDMENTS
Amendments by Pub. L. 110-28, Sec. 8242(a), applicable to notices provided by the Secretary of the Treasury, or his delegate, after the date which is 6 months after the date of the enactment of this Act [Enacted: May 25, 2007].
EFFECTIVE DATE OF 2005 AMENDMENT
Amendment by Pub. L. 109-135, Sec. 303(b)(1), applicable to documents provided on or after the date of the enactment of this Act [Enacted: Dec. 21, 2005].
EFFECTIVE DATE OF 2004 AMENDMENTS
Amendments by Pub. L. 108-357, Sec. 903(a), (b), applicable to taxable years beginning after December 31, 2003.
Amendments by Pub. L. 108-357, Sec. 903(c), applicable with respect to interest accruing after October 3, 2004.
Section 903(d)(2)(B) of Pub. L. 108-357, as amended by Pub. L. 109-135, Sec. 303(a)(1), and Pub. L. 109-432, Sec. 426(b)(1), provided the following exception for reportable or listed transactions:
“(B) SPECIAL RULE FOR CERTAIN LISTED AND REPORTABLE TRANSACTIONS-
“(i) IN GENERAL- Except as provided in clauses (ii), (iii), and (iv), the amendments made by subsection (c) shall also apply with respect to interest accruing on or before October 3, 2004.
“(ii) PARTICIPANTS IN SETTLEMENT INITIATIVES- Clause (i) shall not apply to any transaction if, as of January 23, 2006--
“(I) the taxpayer is participating in a settlement initiative described in Internal Revenue Service Announcement 2005-80 with respect to such transaction, or
“(II) the taxpayer has entered into a settlement agreement pursuant to such an initiative. Subclause (I) shall not apply to any taxpayer if, after January 23, 2006, the taxpayer withdraws from, or terminates, participation in the initiative or the Secretary of the Treasury or the Secretary's delegate determines that a settlement agreement will not be reached pursuant to the initiative within a reasonable period of time.
“(iii) TAXPAYERS ACTING IN GOOD FAITH- The Secretary of the Treasury or the Secretary's delegate may except from the application of clause (i) any transaction in which the taxpayer has acted reasonably and in good faith.
“(iv) CLOSED TRANSACTIONS- Clause (i) shall not apply to a transaction if, as of December 14, 2005--
“(I) the assessment of all Federal income taxes for the taxable year in which the tax liability to which the interest relates arose is prevented by the operation of any law or rule of law, or
“(II) a closing agreement under section 7121 has been entered into with respect to the tax liability arising in connection with the transaction.”
EFFECTIVE DATE OF 2002 AMENDMENTS
Amendments by Pub. L. 107-134, Sec. 112(d)(1), applicable to disasters and terroristic or military actions occurring on or after September 11, 2001, with respect to any action of the Secretary of the Treasury, the Secretary of Labor, or the Pension Benefit Guaranty Corporation occurring on or after the date of the enactment of this Act [Enacted: Jan. 23, 2002].
EFFECTIVE DATE OF 1998 AMENDMENTS
Amendment by Sec. 4003(e)(2) of Pub. L. 105-277 applicable as if included in the provisions of the Taxpayer Relief Act of 1997 to which it relates.
Amendment by Sec. 3305(a) of Pub. L. 105-206 applicable to taxable years ending after the date of enactment [enacted: July 22, 1998].
Amendment by Sec. 3309(a) of Pub. L. 105-206 applicable to disasters declared after December 31, 1997, with respect to taxable years beginning after December 31, 1997.
EFFECTIVE DATE OF 1996 AMENDMENT
Section 301(c) of Pub. L. 104-168 provided that: “The amendments made by this section shall apply to interest accruing with respect to deficiencies or payments for taxable years beginning after the date of the enactment of this Act [Enacted: July 30, 1996].
Section 302(b) of Pub. L. 104-168 provided that: “The amendment made by this section [adding subsection (g)] shall apply to requests for abatement after the date of the enactment of this Act [Enacted: July 30, 1996].
EFFECTIVE DATE OF 1988 AMENDMENT
Amendment by section 1015(n) of Pub. L. 100-647 effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986, Pub. L. 99-514, to which such amendment relates, see section 1019(a) of Pub. L. 100-647, set out as a note under section 1 of this title.
Section 6229(b) of Pub. L. 100-647 provided that: “The amendment made by subsection (a) [amending this section] shall apply with respect to advice requested on or after January 1, 1989.”
EFFECTIVE DATE OF 1986 AMENDMENT
Section 1563(b) of Pub. L. 99-514 provided that:
“(1) In general.--The amendment made by subsection (a) [amending this section] shall apply to interest accruing with respect to deficiencies or payments for taxable years beginning after December 31, 1978.
“(2) Statute of limitations.--If refund or credit of any amount resulting from the application of the amendment made by subsection (a) is prevented at any time before the close of the date which is 1 year after the date of the enactment of this Act [Oct. 22, 1986] by the operation of any law or rule of law (including res judicata), refund or credit of such amount (to the extent attributable to the application of the amendment made by subsection (a)) may, nevertheless, be made or allowed if claim therefore [sic] is filed before the close of such 1-year period.”
EFFECTIVE DATE OF 1980 AMENDMENT
Amendment by Pub. L. 96-589 effective on Oct. 1, 1979, but not applicable to proceedings under Title 11, Bankruptcy, commenced before Oct. 1, 1979, see section 7(e) of Pub. L. 96-589, set out as a note under section 108 of this title.
EFFECTIVE DATE OF 1976 AMENDMENT
Section 1212(b) of Pub. L. 94-455 provided that: “The amendment made by subsection (a) [amending this section] shall apply with respect to returns filed for taxable years ending after the date of enactment of this Act [Oct. 4, 1976].”