If the amount of any tax imposed under the Internal Revenue Code (26 U.S.C.) is not paid on or before the last date prescribed therefor, interest on the underpayment is imposed from that last date to the date paid at statutorily prescribed rates. 26 U.S.C. § 6621 (2000). Prior to 1986, the Internal Revenue Service (IRS) lacked the authority to abate such interest. That changed when Congress, as part of the Tax Reform Act of 1986, Pub.L. No. 94-514, § 1563, 100 Stat. 2085, 2762 (1986), enacted section 6404(e)(1) of the Code, which authorizes the Secretary of the Treasury to abate interest to the extent that it is attributable to IRS errors or delays in performing ministerial acts. In the years following this enactment, numerous courts held that a taxpayer could not obtain judicial review of an IRS decision not to abate interest under this section. However, in 1996, Congress amended the statute, providing, inter alia, jurisdiction for review of abatement denials in the United States Tax Court. See Taxpayer Bill of Rights II, Pub.L. No. 104-168, §§ 301(a), 302(a), 110 Stat. 1452 (1996). The question in the case sub judice is whether the version of section 6404(e)(1) applicable to the tax year in question allows this court to review the Secretary’s decision not to abate interest herein. For the reasons that follow, the court concludes that it does not.
I. FACTS
During his taxable year 1986, plaintiff John Hinck was a limited partner in AgriCal Venture Associates (“ACVA”) and, through ACVA, indirectly held an interest in Rancho California Partners II (“RCP2”). Plaintiff Pamela F. Hinck allegedly is involved in this action solely by virtue of having filed a joint return with her husband for 1986.
On March 14, 1990, the IRS issued notices of final partnership administrative adjustment (FPAA) to ACVA and RCP2, respectively, that determined adjustments to deductions reported on Form 1065 partnership returns in the total amount of $32,815,885 (ACVA) and $17,102,647 (RCP2). On June 13, 1990, a notice partner for each partnership separately filed petitions for readjustment in the United States Tax Court. AgriCal Venture Assoc., William T. and Carroll S. Flowers, Partners Other than the Tax Matters Partner v. Comm’r, Docket No. 012530-90; Rancho California Partners-II, William Young, A Partner Other Than the Tax Matters Partner v. Comm’r, Docket No 012535-90. On or about May 17,1996, plaintiffs made an advance remittance of $93,890.00 to the IRS toward any deficiency of income tax that might result from the adjustments to the partnership returns. On March 10, 1999, plaintiffs executed Forms 870-P(AD), pursuant to which they agreed to settle outstanding tax issues involving their investments in ACVA and RCP2. The IRS counter-signed the Forms 870-P(AD) on May 5, 1999. Although the parties dispute the exact contours of the settlement, they agree that the partnership item adjustments were resolved.
Tax deficiencies arose from these adjustments, on which interest was assessed pursuant to section 6621(c) of the Code. On November 30, 1999, the IRS notified the plaintiffs that, in accordance with the settlement, $64,337 of the ACVA reported loss on the partnership’s 1986 tax return would be disallowed, generating an additional tax liability of $16,409. According to plaintiffs’ complaint, on February 14, 2000, the IRS assessed additional tax and interest against the Hincks, for the taxable year 1986, in the amounts of $16,409.00 and $21,669.22, respectively. That same day, the IRS applied the advance remittance payment to this amount and refunded plaintiffs the balance, $55,811.78.
On June 14, 2000, plaintiffs filed a Form 843, Claim for Refund and Request for Abatement, for their taxable year 1986. Only one of the asserted grounds for refund included in the claim is still at issue, to wit,
On April 30, 2003, plaintiffs filed their complaint in this action, seeking a judgment in the amount of $18,121.98, plus attorney’s fees, interest and costs. On March 11, 2004, defendant filed a motion under RCFC 12(b)(1), seeking to dismiss plaintiffs’ claim that the Secretary should have abated interest that accrued during the aforementioned criminal investigation. Defendant argues that this court lacks jurisdiction to hear the case because the United States Tax Court has exclusive jurisdiction over this matter and because the issue presented is nonjusticiable. On May 3, 2004, plaintiffs filed their response to this motion; defendant filed its reply on May 7, 2004. Oral argument was heard on September 14, 2004.
II. DISCUSSION
In the case sub judice, plaintiffs contend that the Secretary should have abated a portion of the interest that accrued on the deficiency attributable to the settlement of their 1986 tax liability, as it related to their investment in AOVA and RCP2. Plaintiffs premise that claim on section 6404 of the Code, as amended in 1996, which, inter alia, allows the Secretary to abate interest when the interest accrued as a result of an error or delay by an IRS employee in performing a ministerial act. They claim that the 1996 amendments renders inapposite a legion of prior decisions holding that the Secretary’s exercise of authority under the original version of section 6404(e)(1) is not subject to judicial review. Not so, defendant claims. It remonstrates that this court lacks subject matter jurisdiction over this complaint, asserting that, at least for the abatement request in question, the various amendments made to section 6404 neither alter significantly the prior judicial landscape nor, in particular, provide this court with jurisdiction to review the denial of an abatement claim under section 6404(e)(1).
Section 6404(e) was enacted by the Tax Reform Act of 1986, § 1563, Pub.L. No. 99-514, 100 Stat 2085, 2762, which provided:
(a) In General. — Section 6404 (relating to abatements) is amended by adding at the end thereof the following new subsection: “(e) ASSESSMENTS OF INTEREST ATTRIBUTABLE TO ERRORS AND DELAYS BY INTERNAL REVENUE SERVICE.—
“(1) In General. In the case of any assessment of interest on—
“(A) any deficiency attributable in whole or in part to any error or delay by an officer or employee of the Internal Revenue Service (acting in his official capacity) in performing a ministerial act, or “(B) any payment of any tax described in section 6212(a) to the extent that any delay in such payment is attributable to such an officer or employee being dilatory in performing a ministerial act,
the Secretary may abate the assessment of all or any part of such interest for any period____”
The accompanying legislative reports indicated that this statute was enacted to afford the Secretary the authority to abate interest under circumstances in which the IRS caused the taxpayer to incur additional interest charges. See S.Rep. No. 99-313, at 208 (1986); H.R.Rep. No. 99-426, at 844 (1985); see also McMullen v. United States,
In the 1996 Taxpayer Bill of Rights II, see Pub.L. No. 104-168, §§ 301-02, 110 Stat. 1452 (codified as amended in scattered sec
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 within 180 days after the date of the mailing of the Secretary’s final determination not to abate such interest.
Id. at § 302(a). This provision is effective for requests for abatement made after the Act’s date of enactment, and applies to plaintiffs. Id. at § 302(c).
Initially, it is helpful to place the claims here in their proper context, requiring the court, in turn, to identify the statute that gives rise to its tax refund jurisdiction and to determine whether that statute is properly invoked here. Both parties agree that jurisdiction in this case is not afforded by the Administrative Procedures Act (APA), 5 U.S.C. § 701, et seq. (2000), which, as they note, does not constitute a grant of jurisdiction to this court. See Crocker v. United States,
One of the earliest case to examine this jurisdictional issue is United States v. Emery, Bird, Thayer Realty Co.,
In a number of later cases, arising over the years in variety of settings, the Court of Claims reaffirmed that its refund jurisdiction derived from the Tucker Act. Thus, in New England Mut. Life Ins. Co. v. United States,
The jurisdiction of the Court of Claims in tax cases is conferred by 28 U.S.C. § 1491 ... and its jurisdiction over any set-offs or counterclaims of the Government is founded upon 28 U.S.C. §§ 1503, 2508 .... Although the Court of Claims is mentioned in 28 U.S.C. § 1346 ..., it is only mentioned in passing by this younger statutory provision, reference being made to the jurisdiction already extended under the other sections.
Ferguson, supra, at 346 n. 175. More recent times have seen the Federal Circuit and this court continue to track this view of the law. See, e.g., Ontario Power Generation v. United States,
Is there jurisdiction here under section 1491? Defendant answers in the negative, asseverating that “[i]n enacting § 6404(e)(1), Congress did not create a judicially enforceable right to an abatement of interest.” At first blush, the latter justiciability contention might seem nihil ad rem pertinet to the jurisdictional inquiry described in Eastport. Indeed, on brief, defendant does not explicitly link its observations regarding the justiciability of interest abatement decisions to the requirements for invoking this court’s illegal exaction jurisdiction under the Tucker Act. Nonetheless, as was explored at oral argument, it appears that such a nexus exists— that, at least in this court, the justiciability inquiry is inextricably intertwined with that of jurisdiction.
A “[djetermination of jurisdiction starts with the complaint,” the Federal Cir
Prior to 1996, a host of circuits held that interest abatement decisions under section 6404(e)(1) were within the sole discretion of the Secretary and beyond the reach of judicial review. See Argabright v. United States,
Selman, Horton Homes and Argabright are but the anterior of a phalanx of cases concluding that abatement decisions under the original statute were not subject to judicial review.
Although the Federal Circuit has never addressed this issue in a published — and hence, binding — opinion, this court declines plaintiffs’ invitation to skirt the long line of authority construing the prior version of section 6404(e)(1), which includes several decisions in this court. See, e.g., Brahms, swpra. To the contrary, the mode for analyzing justiciability in this court is essentially identical to the APA approach employed in most of these prior decisions. Thus, the Federal Circuit has emphasized repeatedly that “judicial review is only appropriate where the Secretary’s discretion is limited, and Congress has established ‘tests and standards’ against which the court can measure his conduct.” Murphy v. United States,
But, of course, we are not dealing with the original version of the statute. The question
The situation here is not quite what the French novelist Karr had in mind when he penned the classic line “plus qa change, plus c’est la méme chose” — because here things are the same largely because nothing has changed. For one thing, as applicable to this case, the 1996 amendments neither alter the language nor the structure of the statute. The court is confronted with the same “may abate” language that was in the original version, which language still contrasts with the “shall abate” language employed in other parts of section 6404. And, at least in the version of section 6404(e)(1) applicable here — in which the word “unreasonable” is not yet included — the statute still does not give the slightest clue as to how a court might distinguish between permissible and impermissible exercises of the Secretary’s discretion.
Now, of course, one thing has changed somewhat — Congress undeniably has expressed the intention that some court have jurisdiction to review abatement decisions. But, not this court. Nonetheless, plaintiffs aver that, overall, the tenor of the legislative history of the 1996 Act is different than that accompanying the original 1986 version of the statute, and reflects an intent by Congress that abatement decisions be reviewable by courts other than the Tax Court. Per contra. The House Report accompanying the 1996 Act begins by flatly announcing that “Federal courts generally do not have the jurisdiction to review the IRS’s failure to abate interest.” H.R.Rep. No. 104-506, at 28 (1996), U.S.Code Cong. & Admin.News 1996, pp. 1143, 1151. While that report continues that “[t]he Committee believes that it is appropriate for the Tax Court to have jurisdiction to review IRS’ failure to abate interest with respect to certain taxpayers,” it hastens to add that “[n]o inference is intended as to whether under present law any court has jurisdiction to review IRS’ failure to abate interest.” Id. Accordingly, if anything, the legislative history of the 1996 Act indicates that Congress went to great pains to foreclose any assertion that, in affording jurisdiction to the Tax Court, it was sub silentio altering the prior decisional law involving justiciability. See Hadley v. Comm’r,
Any notion that, without express statutory language, this legislative history was intended to render abatement decisions justiciable in courts other than the Tax Court is further undercut by H.R.Rep. No. 106-566 (2000), which describes then “present law” regarding judicial review of abatement decisions in the following terms—
Where abatement of interest is sought separate from any redetermination of tax the availability of judicial review depends upon the basis on which abatement is sought. If the IRS is required to abate the interest, judicial review is available to determine if*81 the facts exist that mandate abatement. The Taxpayer Bill of Rights 2 specifically granted jurisdiction to the Tax Court to review for abuse of discretion any decision by the IRS not to abate interest that is attributable to unreasonable error or delay by Service employees in the performance of a ministerial or managerial act, effective for requests for abatement filed after July 30,1996.
Otherwise, review of the Secretary’s failure to use his or her discretion to abate interest may not be available. The courts have held that judicial review of the IRS’ failure to use its discretion to abate interest is generally not available, unless jurisdiction is specifically granted by statute or a standard for review has been established.
Id. at 32 (footnotes omitted). Indeed, the language of this report is hauntingly reminiscent of that employed in the 1986 reports in stating that section 6404(e)(1) “authorizes, but does not require the abatement of interest,” further explaining that “[ajbatement is at the discretion of the Secretary.” Id. at 29; see also Davies v. United States,
Accordingly, review of this legislative history fails to persuade the court that it now possesses the jurisdiction to review abatement decisions. Certainly nothing in this legislative history suggests that Congress intended to overrule the prior line of cases— indeed, as one district court put it, “[i]f anything, the legislative history indicates the opposite: that Congress believed and intended that the [prior] line of cases would be untouched.” Davies,
In arguing to the contrary, plaintiffs rely heavily on Beall, supra, in which the Fifth Circuit concluded that district courts may review abatement decisions under the new version of section 6404. Preliminarily, the Fifth Circuit reaffirmed the APA analysis employed in Horton Homes, Selman and Argabright, under which judicial review may not be exercised where either a statute precludes it or the reviewed action is committed to agency discretion. Id. at 426. It went so far as to observe that “were we to address today the same issue that faced those courts, we would most likely, and for the same reasons, conclude that judicial review of the Secretary’s decision to deny an abatement request is barred.” Id. Nonetheless, the court found that “[t]he statutory landscape in which we address the Bealls’ claim for interest abatement is ... substantially different.” Id. In this regard, it explained:
Having reviewed those changes, we find that in amending section 6404, Congress clearly expressed its intent that the decision to abate interest no longer rest entirely within the Secretary’s discretion____ We need look no further for support for this conclusion than the simple addition of section 6404(h) granting jurisdiction to the Tax Court review the decision. Indeed, the vesting of jurisdiction in the Tax Court to review interest abatement challenges can be given no meaning other than that the abatement decision is no longer committed solely to agency discretion. Accordingly, we cannot say that either section 701(a)(2) of the APA, or the absence of manageable standards of review generally, any longer precludes judicial review of the denial of a request for abatement.
Id. at 426-27 (citations omitted). Along this decisional path, the Fifth Circuit made short shrift of the legislative history accompanying the 1996 Act. It discounted the House Report’s reference to prior law, i.e., “[fjederal courts generally do not have jurisdiction to review the IRS’ failure to abate interest,” as involving a “misuse” of the term “jurisdiction,” noting that prior eases had dismissed such claims not based on jurisdictional, but rather justiciability, grounds. Id. at 427, n. 11. And it discredited the same report’s “no inference is intended ...” statement, finding this language to be contradicted by Congress’ actions in granting the Tax Court jurisdiction, which, in the Fifth Circuit’s view, inferred an intent to expand review to other courts. Id. at 428, n. 13. Summarizing, the Fifth Circuit concluded that the Congress had “removed the impediment to district court review identified by Horton Homes by indicating that the IRS’ decisions on requested interest abatement were not merely matters of administrative grace and that denials were subject to substantive challenge.” Id. at 430 (emphasis in original).
With all due respect, this court disagrees. Beall essentially collapsed the twin prongs of the justiciability determination into one, effectively concluding that the Congress intended review by all courts simply because it intended to provide review in a single court, namely, the Tax Court. As the legislative history of the 1996 Act reveals, Congress was
Perhaps not surprisingly, outside the Fifth Circuit, Beall has received a mixed reception. While the district court in Letter v. United States,
The statute continues to speak in the ‘permissive, not mandator/ terms noted in Selman: the statute language specifies that the Secretary ‘may abate’ interest assessments caused in whole or part by IRS error, language that contrasts with the phrasing of the next paragraph in the statute, which states that the Secretary ‘shall abate’ the assessment of all interest on any erroneous refund checks. Id. The statutory language does not indicate a right to abatement or direct the Secretary to provide an abatement under specific circumstances. Consequently, the very similar statutory language on which the Tenth and Ninth Circuit previously relied in holding that abatement decisions were committed to agency discretion by law remains relevant to this Court’s analysis.
Id. Moreover, unlike the Fifth Circuit, the district court read the 1996 legislative history as “indicat[ing] Congress’ intent to avoid changing any aspect of the law regarding judicial review of abatement issues, with the exception of adding review under a tax court,” noting that Congress “was careful to do no more.” Id. at 1150. In sum, it concluded that “neither the language of the statute nor the congressional record indicate an intent to remove § 6404 from the ambit of those agency actions not subject to judicial review in the district court.” Id. at 1149.
Based on the foregoing, the court finds that the 1996 amendments to section 6404, insofar as they are applicable here, do not provide a legal basis from which to conclude that the retention of plaintiffs’ funds was an illegal exaction within the meaning of this court’s Tucker Act jurisdiction. Accordingly, this court lacks jurisdiction to consider whether the Secretary erroneously denied plaintiffs’ interest abatement claim.
III. CONCLUSION
This court need go no farther.
IT IS SO ORDERED.
Notes
. For purposes of RCFC 12(b), the court must construe the plaintiffs’ allegations in the light most favorable to the them. Scheuer v. Rhodes,
. As thus amended, section 6404(e)(1)(A) reads: "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 ..." (emphasis added).
. Section 6404(g) was redesignated 6404(i) by the IRS Restructuring and Reform Act of 1998, Pub.L. No. 105-206, § 3305, 112 Stat. 743. Thus, from 1998 until 2002, it appeared in the United States Code as 26 U.S.C. § 6404(i). In 2002, Pub.L. No. 107-134, § 112(d)(1), 115 Stat. 2427, repealed the former subsection (h) and designated then subsection 6404(i) as subsection (h), a designation that still holds.
. Earlier decisions of the Supreme Court had predicated the Court of Claims' tax jurisdiction on the Act of February 25, 1855, ch. 122, 10 Stat. 612, which empowered the fledgling court to determine "all claims founded upon any law of Congress.” Initially, in Nichols v. United States, 7 Wall. 122,
. Eastport was decided after section 1346 was codified in its current form in 1948. See Act of June 25, 1948, 62 Stat. 869, 932 (1948). In 1954, section 1346 was expanded to allow district courts to hear refund suits involving in excess of $10,000. See Act of July 30, 1954, ch. 648, § 1, 68 Stat. 589. (The earlier provision allowing for such suits was triggered only where
. See also Thomas v. United States,
. Were this court to conclude that its tax refund jurisdiction derives from section 1346(a)(1), it would follow, a fortiori, that the source of this court’s jurisdiction over claims less than or equal to $10,000 would not be section 1491, but rather section 1346(a)(2), the so-called Little Tucker Act. Both paragraphs (1) and (2) of section 1346(a) are modified by the precatory language ”[t]he district courts shall have original jurisdiction, concurrent with the United States court of Federal Claims.” Yet, no case in this circuit has ever intimated, let alone held, that this court's jurisdiction in small dollar cases derives from section 1346(a)(2). See, e.g., Doe v. United States,
. United States v. White Mountain Apache Tribe,
. See also United States v. Navajo Nation,
. Other cases include: In re Carlson,
. See also In re Carlson,
. As this court observed in Brahms,
The language of 6404, taken in its entirety, demonstrates that Congress carefully distinguished between discretionary and mandatory abatement of interest. Congress used “may”*79 in 6404(e)(1), but also used "shall” in subsection (e)(2) to establish IRS’ mandatory duty to abate interest.
See also Selman,
. This statement appears in S.Rep. No. 99-313, at 208 (1986); H.R. Rep. No. 99-426, at 844 (1986); and H.R. Conf. Rep. No. 99-841, at II-810 (1986), U.S.Code Cong. & Admin.News 1986, pp. 4075, 4898; see also Jt. Comm, on Tax’n, "General Explanation of the Tax Reform Act of 1986,” 99th Cong., 2d Sess. 1309 (1987). Regarding this legislative history, Horton Homes commented—
In this instance, the legislative history of section 6404(e)(1) is instructive. The various committee reports, as well as the explanation of the staff of the Joint Congressional Committee on Taxation, include the comments that “authority should be available for the IRS to abate the interest independent of the underlying tax liability when errors or delays with respect to ministerial acts have occurred,” and that "where an IRS official acting in his official capacity fails to perform a ministerial act,” then the proposed legislation "gives the IRS the authority to abate interest but does not mandate that it do so.”
Horton Homes,
. The situation presented thus is distinguishable from those in which the term "may” has been construed to mean "shall." See, e.g., Cortez Byrd Chips, Inc. v. Bill Harbert Constr. Co.,
. In this case, the court is not called upon to resolve, and takes no position as to, whether the addition of the word "unreasonable" into the statute would lead to a different result.
. Citizens to Preserve Overton Park, Inc. v. Volpe,
. While the views of subsequent Congresses cannot override the unmistakable intent of the enacting one, Teamsters v. United States,
. Other cases reaching the same conclusion as to the 1996 version of the statute include Carroll v. United States,
. Notably, one of the earliest versions of the bill that became the 1996 Act would have done this expressly. Thus, as introduced, section 5201 of H.R. 4210, 102d Cong. (1992), would have stricken the "may abate" language in section 6404(e)(1) and inserted in lieu thereof the language "shall abate (or refund)." This legislation, however, did not pass. Then, section 301(b) of S. 258, 104th Cong. (1995), would have amended section 6404(e)(1) to indicate that the Secretary "shall abate the assessment of such interest until the date demand for payment is made in the case of a taxpayer described in section 7430(c)(4)(A)(iii).” But, this provision also did not pass. Instead, following criticism of these provisions by government officials at a Congressional hearing, see "Exploring the Development of Taxpayer Bill of Rights II Legislation,” Hearings Before the Subcomm. on Oversight of the Comm, on Ways and Means, 104th Cong. 30, 35-36, 44, 61-62, 127 (March 24, 1995), the bill that emerged from the Ways and Means Committee was H.R. 2337, 104th Cong. (1995), which contains essentially the same language ultimately enacted. This history suggests that Congress knew how to create a mandatory provision, but chose not to.
. Nor is this result, as plaintiffs contend, condemned by perverse consequences. In this regard, plaintiffs note that the Tax Court remedy adopted by Congress is limited to individuals meeting the net worth requirements of section 7430(c)(4)(A)(ii) of the Code. The latter provision of the Code incorporates language from 28 U.S.C. § 2412(d)(2)(B) and thereby generally limits the award of attorney’s fees in tax cases to individuals with net worths less than $2 million and entities with values less than $7 million. By invoking this provision, Congress similarly limited review of abatement decisions in the Tax Court. Plaintiffs suggest, as the Fifth Circuit did in Beall v. United States,
. The court disagrees with the Fifth Circuit’s characterization of this legislative history as incorporating a "misuse of the term ‘jurisdiction.’ ” Beall,
. Much the same analysis disposes of plaintiff’s assertion, also based on Beall, that in authorizing review of abatement decisions by the Tax Court, Congress must have believed that the amended section 6404(e)(1) somehow constrained the Secretary's exercise of discretion. For one thing, it is important to note that section 6404(h) applies to all the abatement provisions under section 6404, including several clearly phrased in mandatory terms with meaningful standards, e.g., 6404(e)(2). Thus, holding that section 6404(h) does not effectuate review of denials under section 6404(e)(1) would not render it a nullity. But, even if Congress abstractly intended section 6404(e)(1) denials to be reviewable, that does not mean that it equipped courts to conduct such reviews by supplying meaningful standards by which to evaluate the Secretary's exercise of discretion. That such standards still may be absent is nowhere better illustrated than in the numerous Tax Court's cases involving section 6404(e)(1), almost all of which reject abatement claims based upon other statutory requirements, i.e., that claimed delay did not relate to a "ministerial” action. See, e.g., Corson v. Comm'r,
. Even were this court wrong to frame this conclusion in jurisdictional terms, at best, the holding here would be that the court had jurisdiction, but could not exercise it under more traditional justiciability principles. "Even where a court possesses jurisdiction to hear a claim,” the Federal Circuit has explained, "it may not do so in cases where the claim presents a nonjusticiable controversy." Adkins v. United States,
. Defendant has also argued that the Tax Court’s jurisdiction over abatement claims is exclusive, thereby suggesting that the 1996 Act withdrew any jurisdiction that this court might otherwise have. Because the court concludes that it lacks jurisdiction over this case, it need not address this contention.