the section permits abatement only if a significant aspect of
the error or delay cannot be attributed to the taxpayer
The facts of this case do not suggest that the assessment of
interest on plaintiff's tax deficiency is attributable to an
error or a delay of an IRS official. Rather, the government
imposed the interest payments pursuant to § 6601(a) due to
plaintiff's failure to timely file his returns and pay the
taxes due. Therefore, as a matter of law, plaintiff is not
entitled to an abatement of the assessed interest.
In addition to interest payments, the IRS imposed penalties
against plaintiff for failing to file tax returns or pay income
tax due, and for failure to pay estimated income tax pursuant
to 26 U.S.C. § 6651 and 6654.
Pursuant to 26 U.S.C. § 6651(a)(1), the IRS must impose
delinquency penalties when a taxpayer fails to file a tax
return on the date prescribed by law, including extensions. The
penalty imposed equals five percent of the amount of the tax
per month not to exceed twenty-five percent of the overall tax
paid. Id. The penalty is imposed on the net amount due, i.e.,
on the difference between the amount required to be shown on
the return and the amount paid on or before the due date, plus
any credits against the tax to which the taxpayer may be
entitled. 26 U.S.C. § 6651(b)(1).
If the taxpayer fails to file his return on the date
prescribed, the IRS must assess a delinquency penalty "unless
it is shown that such failure is due to reasonable cause and
not willful neglect." 26 U.S.C. § 6651(a)(1). It is to be noted
that the taxpayer bears the burden of establishing reasonable
cause. Parkchester Beach Club Corp. v. Comm'r, 335 F.2d 478,
481 (2d Cir. 1964) (citations omitted).
In the case at bar plaintiff introduces nothing to suggest
that the failure to file or pay was due to reasonable cause,
and therefore, fails to meet his burden. See 26 U.S.C. § 6651.
As noted above, plaintiff claims that a dispute with his
employer concerning his employee status, and the IRS's failure
to respond to his request for an employer-employee
determination, resulted in his failure to timely file his
returns or pay his taxes. This Court finds that such an
explanation does not constitute reasonable cause; consequently,
plaintiff may not recover the delinquency penalties already
paid to the IRS. See Church, 810 F.2d at 20.
Regarding the estimated tax penalty, § 6654 of the Code
imposes a penalty on any underpayment of estimated tax by an
individual. 26 U.S.C. § 6654(a). For purposes of this section,
subsection (g)(1) of § 6654 authorizes a taxpayer to substitute
the credits allowed under § 31 (withholding) for his estimated
tax payments. 26 U.S.C. § 6654(g). In practice, if an employer
withholds taxes from an employee's wages, the employee may
apply the amount withheld to his estimated tax payments. Id.
Defendant points out that it is undisputed in this case that
the employer did not withhold any taxes and that plaintiff did
not pay any estimated taxes for 1981. Therefore, plaintiff may
not recover the penalty imposed for failing to pay his
estimated taxes, since unlike the penalties previously
discussed, this penalty provides no exception for reasonable
Based upon the applicable law, plaintiff's failure to timely
file his returns and pay his estimated or actual taxes by the
prescribed dates subjected him to liability for interest and
penalties. Since he has not introduced sufficient evidence to
even raise a genuine issue of material fact as to reasonable
cause, plaintiff is not entitled to a refund of the payments
made. Accordingly, summary judgment must be granted in favor of
the defendant and denied as to plaintiff.
For the reasons stated above, the Court grants defendant's
motion for summary judgment pursuant to Rule 56 of the Federal
Rules of Civil Procedure. The Clerk of the Court is directed to
enter judgment for defendant and close the file in this case.