CARTER v. COMMISSIONER

T.C. Memo. 1998-243

UNITED STATES TAX COURT

JUANITA CARTER, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 18424-94. Filed July 6, 1998.

Juanita Carter, pro se.

Steven W. LaBounty, for respondent.

MEMORANDUM OPINION

COUVILLION, Special Trial Judge: This case was heard
1
pursuant to section 7443A(b)(3) and Rules 180, 181, and 182.

1
Unless otherwise indicated, section references are to the
Internal Revenue Code in effect for the years at issue. All Rule
references are to the Tax Court Rules of Practice and Procedure.
 - 2 -

Respondent determined the following deficiencies in

petitioner's Federal income taxes, additions to tax, and

penalties for the years 1989, 1990, 1991, and 1992:

Addition to Tax Penalty
Year Deficiency Sec. 6651(a)(1) Sec. 6662(a)

1989 $1,744 $436.00 $332.00
1990 1,286 321.50 245.60
1991 1,489 372.25 297.80
1992 1,864 93.20 211.60

The issues for decision are: (1) Whether petitioner failed

to report interest income for 1991 and 1992; (2) whether

petitioner is entitled to dependency exemptions for the 4 years

at issue; (3) whether petitioner is entitled to head-of-household

filing status for the 4 years at issue; (4) whether petitioner is

entitled to a casualty loss deduction under section 165(a) for

1989; and (5) whether petitioner is liable for additions to tax

under section 6651(a)(1) and penalties under section 6662(a) for

the 4 years at issue. One other adjustment, for medical expenses

for the years 1989, 1991, and 1992, is computational and will be

resolved by resolution of the contested issues.

Some of the facts were stipulated, and those facts, with the

annexed exhibits, are so found and are incorporated herein by

reference. At the time the petition was filed, petitioner's

legal residence was Florissant, Missouri.
 - 3 -

During all of the years at issue, petitioner was a retired

teacher, having taught for 38 years at the time of her

retirement. Petitioner filed Federal income tax returns for all

years at issue reporting adjusted gross income of $20,990 for

1989, $21,803 for 1990, $22,635 for 1991, and $23,574 for 1992.

For each year at issue, petitioner claimed head-of-household

filing status and claimed a personal exemption. Petitioner

claimed three dependency exemptions for 1989, four dependency

exemptions for 1990, five dependency exemptions for 1991, and

three dependency exemptions for 1992. For 1989, petitioner

claimed a casualty loss deduction of $5,039.

In the notice of deficiency, respondent determined that

petitioner had unreported interest income of $188 for 1991 and

$170 for 1992, based on information reported to respondent by the

respective payers. Respondent disallowed all the dependency

exemptions claimed by petitioner for each of the years at issue

and, as a result thereof, also disallowed petitioner's head-of-

household filing status for each of those years. Respondent

disallowed petitioner's casualty loss deduction for 1989 and

disallowed portions of petitioner's claimed noncash charitable

contribution deductions for 1989, 1990, and 1991 and disallowed

portions of petitioner's claimed home mortgage interest deduction

and real estate tax deduction for 1992. Finally, respondent

determined that petitioner was liable for the addition to tax,
 - 4 -

under section 6651(a)(1), for failure to file timely Federal

income tax returns and for the accuracy-related penalty under

section 6662(a) for negligence or disregard of rules or

regulations for all years at issue. At trial, respondent

conceded that petitioner was entitled to itemized deductions for

charitable contributions of $1,480, $1,252, and $1,127,

respectively, for 1989, 1990, and 1991. Respondent also conceded

petitioner's entitlement to an additional deduction for $4,549

for home mortgage interest and an additional deduction of $3,081

for real estate taxes for 1992.

The determinations of the Commissioner in a notice of

deficiency are presumed correct, and the burden is on the

taxpayer to prove that the determinations are in error. Rule

142(a); Welch v. Helvering, 290 U.S. 111 (1933). A taxpayer is

required to maintain records sufficient to establish the amount

of his or her income and deductions. Sec. 6001.

The first issue is whether petitioner received unreported

interest income of $188 and $170 for 1991 and 1992, respectively.

Based on information reported to respondent by payers, respondent

determined that petitioner received unreported interest income of

$188 from United Postal Savings Association for 1991, and

unreported interest income of $43 from United Postal Savings

Association and $127 from Lafayette Life Insurance Company for

1992. Section 61 provides that gross income includes "all income
 - 5 -

from whatever source derived", unless otherwise provided.

Further, section 61(a)(4) provides that "interest" must be

included in income.

Petitioner admitted at trial that, during both 1991 and

1992, she held an interest-bearing checking account at United

Postal Savings Association that did produce interest in both of

those years. However, petitioner testified that, although she

had made fruitless attempts to obtain verification of the amounts

of interest, she had no evidence to show the amount of such

interest generated by this account in either 1991 or 1992.

Petitioner also admitted at trial that, during 1992, she was

the owner and beneficiary of a life insurance policy on the life

of her mother, Geneva, which policy was held by Lafayette Life

Insurance Co. and had a face value of $2,000. Petitioner

testified that she never received any interest payments from the

life insurance policy during 1992, and that the amount at issue

herein was not interest but was, rather, a dividend that was not

paid to her but was added to the value of the policy. Petitioner

produced no documentary evidence or testimony of other witnesses

to support this allegation. It is well established that this

Court is not required to accept self-serving testimony in the

absence of corroborating evidence. Niedringhaus v. Commissioner,

99 T.C. 202, 212 (1992); Tokarski v. Commissioner, 87 T.C. 74, 77

(1986).
 - 6 -

Petitioner failed to satisfy her burden of proof on this

issue. On this record, the Court holds that petitioner had

unreported interest income of $188 for 1991 and $170 for 1992, as

determined by respondent in the notice of deficiency.

Respondent, therefore, is sustained on this issue.

The second issue is petitioner's entitlement to various

dependents claimed by petitioner on her income tax returns for

the years at issue. The following table shows the dependents

claimed by petitioner, their relationship to her, and the year or

years such dependents were claimed:

Name & Relationship 1989 1990 1991 1992

Geneva Carter U U U U
(mother)

John Carter U U U U
(brother)

Albert Carter U
(brother)

Char Nea Harris U U U
(grandniece)

Pierce Carter U
(brother)

Shauneille Carter U U
(sister)

Total 3 4 5 3
 - 7 -

Respondent disallowed all of the claimed dependents on the ground

that petitioner failed to establish that she had provided more

than one-half of their support.

At trial, petitioner conceded her claim to a dependency

exemption for her sister, Shauneille, for the years 1990 and

1991.

Geneva Carter, John Carter, Albert Carter, and Pierce Carter

lived in a house, separate from petitioner but which was owned by

petitioner and, for convenience, is referred to as the Lurch

Street house. This house was fully paid for; however, on March

19, 1990, the house was acquired by condemnation by the St. Louis

airport authority and, therefore, was no longer owned by

petitioner. Petitioner's relatives, however, continued living in

the house until July 3, 1991, when they moved to another house

petitioner acquired as a replacement for the Lurch Street house

that was condemned. Neither petitioner nor her relatives paid

any rent to the St. Louis airport authority during the period

from March 19, 1990, to July 3, 1991.

Char Nea Harris, petitioner's grandniece, and Shauneille,

petitioner's sister, lived with petitioner at their house, which,

for convenience, is referred to as the Amblewood Street

residence. That home was encumbered with a mortgage, as to which

petitioner was allowed itemized deductions for home mortgage

interest and real estate taxes.
 - 8 -

Petitioner's three brothers, John, Albert, and Pierce, were

adults. While none of them had full-time jobs, it appears that

each earned some income during the years at issue from odd jobs.

Petitioner's mother, Geneva, was in her 80's, and her only income

was Social Security benefits of $450 per month.

The grandniece, Char Nea Harris, was born in 1986, and both

her parents were deceased. However, at some point, the date of

which is not set out in the record, Char Nea was adopted by

petitioner's sister, Shauneille.

Petitioner's only income, except for the interest discussed

above, was her retirement benefits, which ranged from $22,990 to

$23,574 for the years at issue. Petitioner contends that she

provided more than one-half the total support for the named

dependents (except for her concession of the dependency exemption

as to her sister Shauneille).

Section 151(c) allows taxpayers to deduct an annual

exemption amount for each "dependent", as defined in section 152.

Under section 152(a), the term "dependent" means certain

individuals over half of whose support was received from the

taxpayer during the taxable year in which such individuals are

claimed as dependents. Eligible individuals who may be claimed

as dependents include, among others, a brother, mother, and

foster child of the taxpayer. Sec. 152(a)(3) and (4), (9).
 - 9 -

Section 151(c)(1) further provides, as a condition for the

dependency exemption, that the gross income of the dependent for

the taxable year be less than the "exemption amount" for that

year, unless the claimed dependent is a child of the taxpayer
2
under the age of 19 (24 if the child is a student). Social

Security payments are not "income" within the meaning of section

151 unless the recipient is subject to section 86(a); however, in

determining whether a taxpayer contributed over half the support

of another, amounts of support paid by Social Security benefits

are considered. See Black v. Commissioner, T.C. Memo. 1972-135.

Thus, for purposes of section 151, Geneva (petitioner's mother)

had no income for the year in question. However, in determining

whether petitioner contributed over half of Geneva's support

during the relevant years, the Court must consider the Social

Security benefits received by Geneva in those years.

Respondent agrees that petitioner would be entitled to a

dependency deduction for Geneva, but for the fact that petitioner

did not provide over one-half of Geneva's support during the

relevant years, as required by section 152. Respondent contends

that Geneva's Social Security benefits exceeded one-half of the

amount spent for her support for each of the years at issue.

2
Under sec. 151(d)(1) and (4), the "exemption amount" was
$2,000 for 1989, $2,050 for 1990, $2,150 for 1991, and $2,300 for
1992.
 - 10 -

Petitioner argues that the Social Security benefits received

by her mother cannot be attributed solely to her support because,

petitioner contends, the benefits were not used exclusively for

Geneva's support because petitioner's brothers routinely used

Geneva's Social Security benefits for their own support. Thus,

petitioner argues, only a portion of the Social Security benefits

should be considered to have supported Geneva each year.

Despite the fact that Geneva's Social Security benefits may

have been used by petitioner's brothers and, thus, may have been

used for their support, the Court must reject petitioner's

contention that such amounts used to support others are not to be

considered as support for the dependent in question. Section

1.152-1(a)(2)(i), Income Tax Regs., provides that, in determining

whether an individual received over half of his support from the

taxpayer, "there shall be taken into account the amount of

support received from the taxpayer as compared to the entire

amount of support which the individual received from all sources,

including support which the individual himself supplied." The

Court has interpreted this regulation to mean:

any amount contributed to a common family fund by a
particular member of the household is deemed to have
been supplied in full for his support when such amount
is less than his aliquot share of the entire fund.
* * * Simply because the total cost of support for all
family members is prorated does not justify a proration
of a contributing member's earnings. Such an
interpretation would produce an illogical and
unrealistic result since it would then be possible for
 - 11 -

a member to contribute more to a common family fund
than would be spent for his support and still be
treated as not supporting himself. * * * [De La Garza
v. Commissioner, 46 T.C. 446, 449 (1966), affd. per
curiam 378 F.2d 32 (5th Cir. 1967); see also Meenk v.
Commissioner, T.C. Memo. 1970-302.]

Since the entire amount contributed by Geneva must first be

applied toward her own support, petitioner must show that the

amount of Geneva's Social Security benefits, for each year, was

less than half of the amount expended for Geneva's support in

each year, in order for petitioner to be entitled to a dependency

exemption for Geneva for each year in question.

In Blanco v. Commissioner, 56 T.C. 512, 514-515 (1971), this

Court held that, in establishing that more than one-half of a

dependent's support has been provided, a prerequisite to such a

showing is the demonstration by competent evidence of the total

amount of the dependent's support from all sources for that year.

If the amount of total support is not established and cannot be

reasonably inferred from competent evidence available to the

Court, it is not possible to conclude that the taxpayer claiming

the exemption provided more than one-half of the support of the

claimed dependent.

Petitioner failed to establish the total amount expended for

Geneva's support from all sources for the relevant years, and,

moreover, the Court is unable to reasonably infer this

information from the evidence presented. Petitioner failed to
 - 12 -

satisfy her burden of proving that she provided over one half of

Geneva's support during any of the relevant years. On this

record, the Court holds that petitioner is not entitled to a

dependency exemption for Geneva during any of the relevant years.

The same holds for petitioner's brothers, John, Albert, and

Pierce. Petitioner produced no evidence to show their total

support for any of the years in which they were claimed as

dependents. Petitioner made estimates of these amounts; however,

not one of her estimates was corroborated by any documentary

evidence. Petitioner admitted that at least two of her brothers,

Albert and John, earned some amounts of money during the relevant

years. Moreover, for the period from March 19, 1990, to July 3,

1991, petitioner did not provide their housing because, during

that period, petitioner did not own the home her mother and the

brothers occupied because that property had been acquired by the

St. Louis airport authority. Additionally, John's earned income

was $3,912, $4,060, $4,080, and $4,080, respectively, for 1989,

1990, 1991, and 1992. Thus, his income was greater than the

"exemption amount" provided in section 151(c)(1), and that factor

alone precludes petitioner's entitlement to a dependency

exemption for him. See supra note 2.

With respect to petitioner's brother Pierce, who was claimed

as a dependent only for 1991, petitioner also provided no

evidence as to his total support, nor did she present any
 - 13 -

documentation to establish the amounts that she provided for his

support.

On this record, petitioner failed to establish her

entitlement to dependency exemptions for her brothers John,

Albert, and Pierce for any of the years at issue. Respondent,

therefore, is sustained on this issue.

Finally, with respect to petitioner's grandniece, Char Nea

Harris, who was claimed as a dependent for 1990, 1991, and 1992,

although the child lived with petitioner, the record also shows

that petitioner's sister, Shauneille, lived with petitioner and

Char Nea for at least 1990 and 1991. Shauneille adopted Char Nea

at some time. Shauneille was also gainfully employed during

these years. Given these circumstances, it is evident to the

Court that Shauneille provided some support to Char Nea during

the years in question. Again, petitioner presented no evidence

to show Char Nea's total support for these years and no

documentation that would support petitioner's contention that

petitioner's contribution toward that support was one-half or

more of the total support. Respondent, therefore, is sustained

on this issue.

The third issue is whether petitioner is entitled to head-

of-household filing status for 1989, 1990, 1991, and 1992.

Section 2(b) defines a head-of-household as an individual

taxpayer who (1) is not married at the close of the taxable year,
 - 14 -

and (2) maintains as a home a household that constitutes "for

more than one-half of such taxable year" the principal place of

abode (as a member of such household) of a son, daughter or other

qualifying dependent (for which the taxpayer is entitled to a
3
deduction under section 151) of the taxpayer. Sec. 2(b). For

this purpose, a taxpayer is considered to maintain a household

only when: (1) The household constitutes the home of the taxpayer

for the taxpayer's taxable year, and (2) the taxpayer pays over

half of the cost of running the household. Sec. 2(b)(1); sec.

1.2-2(d), Income Tax Regs. Section 1.2-2(d), Income Tax Regs.,

further provides:

The cost of maintaining a household shall be the
expenses incurred for the mutual benefit of the
occupants thereof by reason of its operation as the
principal place of abode of such occupants for such
taxable year. The cost of maintaining a household
shall not include expenses otherwise incurred. The
expenses of maintaining a household include property
taxes, mortgage interest, rent, utility charges, upkeep
and repairs, property insurance and food consumed on
the premises. Such expenses do not include the cost of
clothing, education, medical treatment, vacations, life
insurance, and transportation. * * * [Emphasis added.]

Respondent contends that petitioner did not, during any of

the years at issue, maintain such a household, nor did she

3
Under sec. 2(b)(1)(A), with respect to a son, stepson,
daughter, stepdaughter, or descendants of a son or daughter, such
individuals need not be dependents of the taxpayer under sec. 151
unless such individuals are married, in which event, they must
also qualify as dependents under sec. 151.
 - 15 -

provide over one half of the cost of maintaining such a

household.

During the years in question, petitioner lived in her home

with Char Nea and Shauneille. The Court has held that petitioner

failed to prove she contributed more than one half of Char Nea's

support for any of the years at issue; thus, she is not entitled

to a dependency exemption for Char Nea for any of those years.

Moreover, petitioner conceded that she is not entitled to

dependency exemptions for Shauneille for 1990 and 1991, and she

did not claim them for 1989 and 1992. Consequently, neither Char

Nea nor Shauneille can be considered as qualifying dependents for

purposes of section 2(b). Likewise, petitioner failed to prove

she provided over one half of the cost of maintaining a household

for any other qualifying dependent.

On this record, the Court holds that petitioner is not

entitled to head-of-household filing status for any of the years

at issue. Respondent is, therefore, sustained on this issue.

The fourth issue is whether petitioner is entitled to a

casualty loss deduction, under section 165(a), in the amount of

$5,039 for 1989. On her income tax return for 1989, petitioner

included five Forms 4684, Casualties and Thefts, pursuant to

which she claimed casualty losses of $6,488. After application

of the 10-percent adjusted gross income floor, the amount of the

loss, $4,389, was carried over to Schedule A, Itemized
 - 16 -

Deductions, to which amount petitioner added $250 for "Theft" and

$400 for a bad debt, all of which totaled $5,039 as a casualty

loss claim. Petitioner contends that she sustained the casualty

during 1989 as a result of an eminent domain action against her

Lurch Street home in connection with the expansion of the St.

Louis Municipal Airport (airport). Pursuant to such eminent

domain procedures, petitioner sold her house to the City of St.

Louis, Missouri, during 1989 and secured alternate housing.

Petitioner contends that, at some time during 1989, the airport

arranged for the moving of petitioner's personal belongings from

her old home into her new home; however, some items of her

personal property were left behind in the basement of her former

home, and, before petitioner had the opportunity to retrieve her

personal property, the airport demolished the home, including her

personal property.

On August 23, 1993, petitioner filed a Complaint in the U.S.

District Court for the Eastern District of Missouri (District

Court) against the airport requesting, among other relief,

reimbursement for her damaged personal property. On October 27,

1995, the District Court dismissed petitioner's Complaint, with

prejudice.

Petitioner contends that she should be allowed to deduct the

full amount of her loss in 1989 as a casualty loss because she
 - 17 -

was unsuccessful in collecting any judgment against the airport,
4
and, as a result, she was not compensated for her loss.

Respondent contends that petitioner's casualty loss is not

deductible until such time as there is no reasonable prospect of

a recovery of such loss. Respondent argues that petitioner's

loss did not become uncollectible until 1995 because, up until

that time, petitioner continued her efforts to collect damages

from the airport; thus, the possibility existed that her loss

would be compensated for after 1989 up until the disposition of

her suit in October 1995. Additionally, respondent contends that

petitioner failed to substantiate either her basis in or the fair

market value of the damaged property.

Section 165(a) allows a taxpayer to deduct any loss

sustained during the taxable year and not compensated for by

insurance or otherwise. In particular, section 165(c)(3) allows

a deduction to an individual for loss of property not connected

with a trade or business or a transaction entered into for

profit, if such loss arises from fire, storm, shipwreck, or other

casualty, or from theft. Personal casualty or theft losses are

deductible only to the extent that the loss exceeds $100 and 10

percent of adjusted gross income. Sec. 165(h)(1) and (2).

4
Respondent does not contend that any portion of the losses
was compensated by insurance.
 - 18 -

The measure of a casualty or theft loss is determined by

section 1.165-7(b)(1), Income Tax Regs. Generally, the loss

shall be the lesser of (1) the fair market value of the property

immediately before the casualty reduced by the fair market value

of the property immediately after the casualty, or (2) the amount

of the adjusted basis prescribed in section 1.1011-1, Income Tax

Regs., for determining loss from the sale or other disposition of

the property. Under section 1.1011-1, Income Tax Regs., adjusted

basis is the cost or other basis of property under section 1012,

adjusted to reflect allowable deductions for depreciation under

section 1016. In this case, petitioner does not contend that any

of the relevant property was ever used in a trade or business;

consequently, the cost or basis of the property was not subject

to adjustment for depreciation. Petitioner produced no evidence

of her basis in or the fair market value of the relevant damaged

items of property.

Apart from petitioner's failure to establish basis, section

1.165-1(d), Income Tax Regs., provides:

Year of deduction. (1) A loss shall be allowed as a
deduction under section 165(a) only for the taxable year in
which the loss is sustained. * * * (2)(i) If a casualty or
other event occurs which may result in a loss and, in the
year of such casualty or event, there exists a claim for
reimbursement with respect to which there is a reasonable
prospect of recovery, no portion of the loss with respect to
which reimbursement may be received is sustained, for
purposes of section 165, until it can be ascertained with
reasonable certainty whether or not such reimbursement will
be received. Whether a reasonable prospect of recovery
 - 19 -

exists with respect to a claim of reimbursement of a loss is
a question of fact to be determined upon an examination of
all facts and circumstances. Whether or not such
reimbursement will be received may be ascertained with
reasonable certainty, for example, by a settlement of the
claim, by an adjudication of the claim, or by an abandonment
of the claim. * * * [Emphasis added.]

In 1993, petitioner filed suit against the airport seeking

compensation for the loss of her property. In 1995, her suit was

dismissed with prejudice. Her efforts to obtain reimbursement

for her loss subsequent to 1989 are clear. Petitioner obviously

felt that she had a reasonable prospect of collecting a judgment

or other compensation for her loss during or after 1989. Not

until 1995, when her suit was dismissed with prejudice, did

petitioner's loss become "sustained" within the meaning of

section 165 because, only at that time, could it be "ascertained

with reasonable certainty" that petitioner would not receive

compensation for her loss. It follows that petitioner did not

"sustain" (as defined in section 1.165-1(d)(2)(i), Income Tax

Regs.) a casualty loss in 1989, as required under section 165(a)

in order for such loss to be deductible in that year. Respondent

is, therefore, sustained on this issue.

The fifth issue is whether petitioner is liable for the

addition to tax under section 6651(a)(1) for failure to file

timely a Federal income tax return for 1989, 1990, 1991, and 1992

and the penalty under section 6662(a) for negligence or

intentional disregard of rules or regulations.
 - 20 -

Section 6651(a)(1) imposes an addition to tax for a

taxpayer's failure to file a timely return, unless the taxpayer

can establish that such failure "is due to reasonable cause and

not due to willful neglect".

Respondent introduced postmarked envelopes, in which

petitioner's Federal income tax returns for 3 of the 4 years at

issue were mailed, showing that petitioner mailed her 1990

Federal income tax return, the due date for which was April 15,

1991, on November 11, 1991; her 1991 Federal income tax return,

the due date for which was April 15, 1992, on March 3, 1993; and

her 1992 Federal income tax return, the due date for which was

April 15, 1993, on August 17, 1993. Additionally, respondent

introduced official Internal Revenue Service transcripts of

account for petitioner's Federal income taxes (transcripts) for

each of the years at issue, which reflected that petitioner's

1989 Federal income tax return was filed on March 16, 1992, her

1990 Federal income tax return was filed on December 23, 1991,

her 1991 Federal income tax return was filed on March 22, 1993,

and her 1992 Federal income tax return was filed on September 27,

1993. The transcripts also reflected that petitioner had not

requested nor had she been granted a filing extension for any of

the years at issue.

Petitioner contends that she filed timely her 1989 Federal

income tax return but that respondent lost the original return
 - 21 -

and requested she file another one, which she did. Petitioner

claims that the March 16, 1992, filing date listed on the

transcript of her 1989 tax year actually reflected the filing of

the copy of her return and did not reflect the date of her

original filing of her 1989 return (which respondent allegedly

misplaced). Petitioner produced no documentary evidence to

support this allegation. The Court is satisfied, on this record,

that March 16, 1992, is the original filing date of petitioner's

1989 Federal income tax return and that such return was not filed

timely.

Petitioner admits that the envelopes marked November 11,

1991, March 3, 1993, and August 17, 1993, reflected the actual

mailing dates of her returns for 1990, 1991, and 1992,

respectively; however, she argues that various illnesses prior to

the due dates for each of these three returns incapacitated her

to a degree that she could not file timely her returns.

Petitioner also contends that she requested and received an

extension of time to file each of these three returns; however,

she failed to produce copies of such extensions at trial.

Petitioner was in an automobile accident in March 1991 that

resulted in the spraining of her back; in 1992 she had

conjunctivitis and her doctor "gave [her] the wrong medicine and

blinded [her]"; and, in 1993, she had another auto accident that

caused her additional physical pain. In support of her claims,
 - 22 -

petitioner introduced an ambiguous document of unspecified origin

entitled "Settlement Authority" that appears to evidence a

settlement in the matter of "Juanita Carter v. Jeffrey Clark

(American Family)", the date of injury being March 5, 1990. The

document fails to indicate whether the "settlement" described

therein was made in connection with an administrative claim, a

lawsuit, or any other similar proceeding. Petitioner also

introduced a collection of medical bills consisting of: (1) A

bill from DePaul Health Center for services rendered on

October 5, 1991, apparently in relation to an eye problem;

(2) three bills from St. Louis Eye Clinic for services rendered

on October 7, 1991, January 8, 1992, and February 26, 1992; (3) a

bill from Emergency Physician Services for services rendered at

DePaul Health Center on September 26, 1992, in relation to a back

sprain; (4) a bill from Ernst Radiology Clinic, Inc., for

services rendered on September 26, 1992, in relation to neck and

back pain; (5) a bill from DePaul Health Center for services

rendered on December 7, 1992, in relation to diagnostic chest x

rays; and (6) a bill from Ernst Radiology Clinic, Inc., for

services rendered on December 7, 1992, in relation to pneumonia.

Most of these documents fail to correspond with petitioner's

testimony regarding the timing of her several ailments during the

years at issue. Moreover, although the Court is satisfied that

petitioner experienced medical problems during the years in
 - 23 -

question, petitioner failed to show that any such illnesses or

injuries incapacitated her to the point that she could not, with

reasonable effort, file on time her Federal income tax returns

for the years at issue. The Court finds, on this record, that

petitioner's Federal income tax returns for 1990, 1991, and 1992

were not filed timely and that the late filings were not due to

reasonable cause. Respondent, therefore, is sustained on this

issue.

The final issue is whether petitioner is liable for the

accuracy-related penalty under section 6662(a) for negligence or

disregard of rules or regulations, for 1989, 1990, 1991, and

1992. Section 6662(a) provides that, if it is applicable to any

portion of an underpayment in taxes, there shall be added to the

tax an amount equal to 20 percent of the portion of the

underpayment to which section 6662 applies. Section 6662(b)(1)

provides that section 6662 shall apply to any underpayment

attributable to negligence or disregard of rules or regulations.

Section 6662(c) provides that the term "negligence" includes

any failure to make a reasonable attempt to comply with the

provisions of the Internal Revenue laws, and the term "disregard"

includes any careless, reckless, or intentional disregard of

rules or regulations. Negligence is the lack of due care or

failure to do what a reasonable and ordinarily prudent person
 - 24 -

would do under the circumstances. Neely v. Commissioner, 85 T.C.

934, 947 (1985).

However, under section 6664(c), no penalty shall be imposed

under section 6662(a) with respect to any portion of an

underpayment if it is shown that there was a reasonable cause for

such portion and that the taxpayer acted in good faith with

respect to such portion. The Commissioner's determination is

presumptively correct and will be upheld unless the taxpayer is

able to rebut the presumption. Luman v. Commissioner, 79 T.C.

846, 860-861 (1982); Bixby v. Commissioner, 58 T.C. 757 (1972);

Reily v. Commissioner, 53 T.C. 8 (1969).

In the notice of deficiency, respondent applied the section

6662(a) penalty to "all of the underpayment of tax" for each of

the years at issue, due to petitioner's "negligence or

intentional disregard of rules or regulations".

With regard to those adjustments conceded by petitioner and

those sustained by this Court, petitioner presented no evidence

to show that she used due care in failing to report interest

income, claiming dependency exemptions, claiming head-of-

household filing status, and claiming the casualty loss

deduction, nor did she present evidence to show that she had

reasonable cause to omit such items of income and claim such

exemptions, deductions, and filing status.
 - 25 -

On this record, the Court holds that petitioner negligently

or intentionally disregarded rules or regulations with regard to

the underpayment of tax for each year at issue, with the

exception of those adjustments conceded by respondent.

Accordingly, the accuracy-related penalty under section 6662(a)

is sustained.

Decision will be entered

under Rule 155.