T.C. Memo. 1997-555
UNITED STATES TAX COURT
LLOYD D. SHEPHERD, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 23963-96. Filed December 22, 1997.
Timothy Patrick Assaf, for petitioner.
Russell D. Pinkerton and Peter Reilly, for respondent.
MEMORANDUM OPINION
ARMEN, Special Trial Judge: This matter is before the Court
on respondent's Motion for Summary Judgment filed pursuant to
Rule 121.1 As explained in greater detail below, we will grant
respondent's motion.
1
Unless otherwise indicated, all section references are to
the Internal Revenue Code, as amended, and all Rule references
are to the Tax Court Rules of Practice and Procedure.
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Background
Respondent issued a notice of deficiency to Lloyd D.
Shepherd (petitioner) determining deficiencies in and additions
to his Federal income taxes for the taxable years and in the
amounts as follows:
Additions to Tax
Sec. Sec. Sec.
Year Deficiency 6651(a) 6653(a)(1) 6654
1988 $4,994 $1,248.50 $249.70 $320.74
1989 5,553 1,388.25 -- 376.04
1990 5,385 1,346.25 -- 393.91
1991 5,811 1,452.75 -- 334.24
1992 5,722 1,430.50 -- 249.56
1993 3,449 862.25 -- 144.50
The notice of deficiency includes an explanation that, in the
absence of adequate records, respondent reconstructed
petitioner's taxable income for the years in issue based upon an
indirect method of proof.
Petitioner invoked this Court's jurisdiction by filing a
timely petition for redetermination.2 Respondent filed a timely
answer to the petition.
Respondent subsequently served petitioner with a request for
admissions (with attached exhibits) pursuant to Rule 90(a), and
filed the same with the Court pursuant to Rule 90(b). Petitioner
failed to respond to respondent's request for admissions. As a
consequence, each matter set forth therein is deemed admitted
2
At the time that the petition was filed, petitioner
resided at Union City, Indiana.
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pursuant to Rule 90(c).3 Alexander v. Commissioner, 926 F.2d
197, 198-199 (2d Cir. 1991), affg. T.C. Memo. 1990-315; Marshall
v. Commissioner, 85 T.C. 267, 272 (1985); Morrison v.
Commissioner, 81 T.C. 644, 647 (1983).
The following is a summary of the matters that petitioner is
deemed to have admitted pursuant to Rule 90(c).
Petitioner was pastor of the Cornerstone Baptist Church in
Union City, Indiana, during the taxable years 1988 through 1993.
Petitioner did not file income tax returns for the taxable years
1988 through 1993. Petitioner had taxable income in the amounts
3
Rule 90 states in pertinent part:
(a) Scope and Time of Request: A party may serve
upon any other party a written request for the
admission, for purposes of the pending action only, of
the truth of any matters which are not privileged and
are relevant to the subject matter involved in the
pending action, but only if such matters are set forth
in the request and relate to statements or opinions of
fact or of the application of law to fact, including
the genuineness of any documents described in the
request. * * *
* * * * * * *
(c) Response to Request: Each matter is deemed
admitted unless, within 30 days after service of the
request or within such shorter or longer time as the
Court may allow, the party to whom the request is
directed serves upon the requesting party (1) a written
answer specifically admitting or denying the matter
involved in whole or in part, or asserting that it
cannot be truthfully admitted or denied and setting
forth in detail the reasons why this is so, or (2) an
objection, stating in detail the reasons therefor.
* * *
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of $19,930, $21,599, $21,736, $23,369, $23,221, and $15,201
during the taxable years 1988, 1989, 1990, 1991, 1992, and 1993,
respectively. Petitioner is liable for deficiencies in income
tax in the amounts of $4,994, $5,553, $5,385, $5,811, $5,722, and
$3,449 for the taxable years 1988, 1989, 1990, 1991, 1992, and
1993, respectively.
Petitioner is also deemed to have admitted, pursuant to Rule
90(c), the following matters:
Petitioner has provided no reasonable cause for his failure
to file income tax returns for the taxable years 1988 through
1993. Petitioner is liable for the additions to tax pursuant to
section 6651(a)(1) for each of the years in issue as determined
in the notice of deficiency. Petitioner has provided no basis
for his failure to pay estimated taxes for the taxable years 1988
through 1993. Petitioner is liable for the additions to tax
pursuant to section 6654(a) for each of the years in issue as
determined in the notice of deficiency. Petitioner's failure to
file his tax return for 1988 is due to negligence or disregard of
rules or regulations. Petitioner is liable for the addition to
tax pursuant to section 6653(a)(1) for the taxable year 1988 as
determined in the notice of deficiency.
As indicated, respondent filed a Motion for Summary Judgment
seeking judgment in respondent's favor on all issues. Respondent
contends that the matters deemed admitted in this case pursuant
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to Rule 90(c) establish that petitioner is liable for the
deficiencies and the additions to tax as determined by the
respondent in the notice of deficiency.
On November 3, 1997, the Court issued an order calendaring
respondent's motion for hearing and directing petitioner to file
a response to respondent's motion by November 21, 1997. The
order also included a reminder to the parties of the
applicability of Rule 50(c). Petitioner failed to file a
response to respondent's motion.
Respondent's motion was called for hearing at the motions
session of the Court held in Washington, D.C., on December 3,
1997. Counsel for respondent appeared at the hearing and
presented argument in support of the motion. No appearance was
entered by or on behalf of petitioner, nor did petitioner file a
statement with the Court pursuant to Rule 50(c).
Discussion
Summary judgment is intended to expedite litigation and
avoid unnecessary and expensive trials. Florida Peach Corp. v.
Commissioner, 90 T.C. 678, 681 (1988). Summary judgment is
appropriate "if the pleadings, answers to interrogatories,
depositions, admissions, and any other acceptable materials,
together with the affidavits, if any, show that there is no
genuine issue as to any material fact and that a decision may be
rendered as a matter of law." Rule 121(b); Sundstrand Corp. v.
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Commissioner, 98 T.C. 518, 520 (1992), affd. 17 F.3d 965 (7th
Cir. 1994); Zaentz v. Commissioner, 90 T.C. 753, 754 (1988);
Naftel v. Commissioner, 85 T.C. 527, 529 (1985). Rule 121(d)
states that:
When a motion for summary judgment is made and
supported as provided in this Rule, an adverse party
may not rest upon the mere allegations or denials of
such party's pleading, but such party's response, by
affidavits or as otherwise provided in this Rule, must
set forth specific facts showing that there is a
genuine issue for trial. If the adverse party does not
so respond, then a decision, if appropriate, may be
entered against such party.
See King v. Commissioner, 87 T.C. 1213, 1217 (1986). The moving
party, however, bears the burden of proving that there is no
genuine issue of material fact, and factual inferences will be
read in a manner most favorable to the party opposing summary
judgment. Dahlstrom v. Commissioner, 85 T.C. 812, 821 (1985);
Jacklin v. Commissioner, 79 T.C. 340, 344 (1982). Summary
judgment is appropriate where the facts deemed admitted pursuant
to Rule 90(c) support a finding that there is no genuine issue as
to any material fact. Morrison v. Commissioner, 81 T.C. 644,
651-652 (1983).
Based upon our review of the record, and as a consequence of
petitioner's failure to respond to respondent's Motion for
Summary Judgment, we are satisfied that there is no genuine issue
of material fact and that respondent is entitled to judgment as a
matter of law.
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The deficiencies determined by respondent in this case arise
from a reconstruction of petitioner's taxable income because of
petitioner's failure to provide respondent with adequate records
or file income tax returns for the taxable years in issue. The
factual allegations deemed admitted by petitioner under Rule
90(c) establish: (1) Petitioner received taxable income during
the years in issue in the amounts determined in the notice of
deficiency; (2) petitioner failed to establish reasonable cause
for his failure to file income tax returns and has provided no
basis for his failure to pay estimated taxes during the years in
issue; (3) petitioner is liable for the addition to tax pursuant
to section 6653(a)(1) for the taxable year 1988; and (4)
petitioner is liable for the deficiencies and additions to tax
for the years in issue as determined by respondent in the notice
of deficiency.
In sum, the factual allegations deemed admitted by
petitioner under Rule 90(c) establish that respondent's
determinations with respect to petitioner's liabilities for the
deficiencies and additions to tax for the taxable years 1988
through 1993 are correct, and we so hold.
In the absence of any dispute as to a material fact in this
case, we will grant respondent's Motion for Summary Judgment.
To reflect the foregoing,
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An order granting respondent's
Motion for Summary Judgment and decision
will be entered.