Enmeshed in the toils of a lack of a Grade 12 RO at a location near him to deal with his Form 941 problems, a lack of response by an IRS employee, and befuddled by the difference between Form 2504 and Form 9456 (the magic carpet to an installment agreement), Lonesome Charlie King, Esq., finds himself owing excessive interest on his unpaid (but now paid) Forms 941.

Judge Paris generously knocks off about two months’ worth, in Charles W. King, 2015 T. C. Memo. 36, filed 3/9/15.

I bestow the “Lonesome Charlie” sobriquet on Mr. King, because for upwards of 40 years he has been a single-shingle in a small Illinois town. I have a fellow-feeling for single-shingles, as I am one myself, albeit in a highly-urbanized environment.

Charlie doesn’t bother with some 941s, IRS gets testy, and Charlie tries to work it out, but the friendly examiner he first works with disappears after Charlie files the missing 941s and agrees with the examiner as to the bottom line. Of course, Charlie hasn’t got the cash to pay on the spot the tax plus additions, penalties and interest.

Charlie wants installment treatment, but the examiner is gone and successor IRS employee says “We have considered the information that you have submitted and will be happy to honor your request for an installment payment plan. However, before we process your installment agreement request it will be necessary for you to sign, date and return the revised Forms 2504 we sent to you…within ten days.” 2105 T. C. Memo. 36, at p. 5.

Charlie sends the Forms 2504 and nothing happens for two months, at which time NITLs rain down on Lonesome Charlie.

Charlie calls IRS, who sends him to TAS, Nina (“The Big O”) Olson’s sanctuary for the overwhelmed, who finally get a Form 9456 filed.

Now the one overwhelmed is the only friendly neighborhood Grade 12 RO in the neighborhood, who is the only one capable to dealing with business 941s of the magnitude of Charlie’s. Unhappily for Charlie, unavailability of IRS personnel is not grounds for finding the IRS acted unreasonably.

And while the IRS employee who shunted Charlie off to TAS may have been off-loading his own error, Judge Paris likes TAS: “Although respondent may have shuffled petitioner to TAS to resolve his own mistakes, TAS is an independent body, see sec. 7803(c), and was not under obligation to assist petitioner with his case, see IRM pt. 13.1.7.1 (July 23, 2007) (stating that TAS may identify its own criteria that qualify taxpayers for TAS assistance). Further, TAS is not a substitute for regular IRS procedures. Petitioner has not shown that, but for a particular action that TAS took, his employment tax obligations would have been paid sooner. Rather, TAS facilitated petitioner’s working toward a collection alternative by providing information about collection alternatives and forwarding his case to a qualified RO. Accordingly, the interest that accrued while TAS worked on petitioner’s case was not excessive and respondent did not abuse his discretion in failing to abate it.” 2105 T. C. Memo. 36, at p. 29.

And in any case, Tax Court has no jurisdiction to abate interest with respect to employment taxes.

So is Lonesome Charlie out there on his lonesome?

No, because the two months between when Charlie sent in the 2504s and the rain of NITLs caused excessive interest to accrue.

To the rescue, Section 6404(a): “Section 6404(a) provides: ‘The Secretary is authorized to abate the unpaid portion of the assessment of any tax or any liability in respect thereof, which–(1) is excessive in amount, or (2) is assessed after the expiration of the period of limitation properly applicable thereto, or (3) is erroneously or illegally assessed.’ The term ‘any liability in respect thereof’ includes interest that has accrued on the underlying tax. H & H Trim & Upholstery Co. v. Commissioner, T.C. Memo. 2003-9.” 29015 T. C. Memo. 36, at p. 19.

Everybody agrees that the interest wasn’t barred by SOL or illegal; Charlie says it was “erroneous”, but Judge Paris says “excessive.”

The test is “but for” IRS employee sitting for two months on Charlie’s Forms 2504 without asking him for more info, would the interest have accrued?

IRS claims H&H, abovecited, was wrongly decided, but that cuts no ice. And although the IRM isn’t law, the IRS employee was supposed to ask for more info than Charlie provided. “Excessive” means  “unfair”, says Judge Paris, and it would be unfair to stick Lonesome Charlie for that interest.

Everything else, though, stands.