While the Internal Revenue Code allows for the avoidance of penalties at times (e.g., if the taxpayer acted reasonably), interest on late payment of taxes generally cannot be removed or abated. An exception exists if the IRS, in its discretion, determines to abate interest for a tax deficiency or a delay in making a tax payment to the extent such failure or delay is attributable to an officer or employee of the IRS. IRC Section 6404(e).
In 1996, under the Taxpayer Bill of Rights II, Congress gave the Tax Court jurisdiction to review interest abatement denials for abuse of discretion. Since then, various courts have been split on whether the Tax Court is the exclusive court for such reviews, or whether federal district courts or the Claims Court can also review such denials. Due to the split, the U.S. Supreme Court took on the issue to resolve the uncertainty.
In Hinck v. U.S., 99 AFTR2d 2007-986 (2007), the Supreme Court has indicated that the Tax Court is the ONLY court with jurisdiction to review such interest abatement determinations for abuse of discretion.