T.C. Memo. 1998-370
UNITED STATES TAX COURT
SUZANNE F. MOTTOLA, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 24636-95. Filed October 9, 1998.
Suzanne F. Mottola, pro se.
Keith L. Gorman, for respondent.
MEMORANDUM OPINION
WHALEN, Judge: This case is before the Court to
decide respondent's oral motion for summary judgment.
At issue is whether respondent correctly determined the
following deficiencies in, and additions to, petitioner's
income tax:
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Additions to Tax
Year Deficiency Sec. 6651(a)(1) Sec. 6654(a)
1992 $36,284 $9,071 --
1993 38,134 9,534 $1,584
All section references are to the Internal Revenue Code in
effect during the years in issue.
During the years in issue, petitioner was a self-
employed attorney. At the time she filed her petition in
this case, petitioner resided in Devon, Pennsylvania.
Petitioner failed to file Federal income tax returns
for the years 1992 and 1993. She did not maintain adequate
books and records from which her tax liability for those
years could be computed. Accordingly, respondent used
the bank deposits method to reconstruct petitioner's income
and determined the above tax deficiencies and additions to
tax in a notice of deficiency issued to petitioner.
Respondent served a request for admissions on
petitioner. Rule 90(c) of the Tax Court Rules of Practice
and Procedure states that "Each matter is deemed admitted
unless, within 30 days after service of the request * * *
the party to whom the request is directed serves upon the
requesting party: (1) a written answer * * * or (2) an
objection, stating in detail the reasons therefor." All
Rule references are to the Tax Court Rules of Practice
and Procedure. Petitioner did not respond or object to
respondent's request for admissions within 30 days after
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service, or at any other time. Accordingly, pursuant to
Rule 90(c), each matter set forth therein was deemed
admitted. See Freedson v. Commissioner, 65 T.C. 333,
334-336 (1975), affd. 565 F.2d 954 (5th Cir. 1978).
Petitioner is deemed to have made the following admissions:
1. Petitioner has not filed federal income tax
returns for the taxable years 1992 and 1993.
2. Petitioner was engaged in a trade or business
during 1992 and 1993.
3. Petitioner failed to maintain any records
reflecting the income and expenses of her trade
or business.
4. During 1992 petitioner made total deposits of
$104,090.44 into her bank accounts.
5. Of the net deposits into their [sic] accounts
in 1992, $0.00 represented non-taxable items.
6. During 1993 petitioner made total deposits of
$101,558.00 into her bank accounts.
7. Of the net deposits into her accounts in 1993,
$0.00 represented non-taxable items such as
returned checks.
8. Petitioner did not deposit all of her business
income into her bank accounts.
9. The entire amount of the deposits into
petitioner's bank accounts in 1992 and 1993
represented taxable income.
10. Petitioner had no other non-taxable sources for
the deposits made into her bank accounts.
11. During the years 1992 and 1993 petitioners [sic]
failed to maintain complete and accurate records
of their [sic] income.
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12. In the notice of deficiency respondent determined
that petitioner was liable for an [sic] additions
to tax pursuant to I.R.C. § 6651(a), in the
amount of $9,071.00 in 1992 and $9,534.00 in
1993.
13. Petitioner concedes her liability for the
additions to tax under I.R.C. §§ [sic] 6651(a)
as determined in the notice of deficiency.
14. In the notice of deficiency respondent
determined that petitioner was liable for
an [sic] additions to tax pursuant to I.R.C.
§ 6654, in the amount of $1,584.00 for the
year 1993.
15. Petitioner concedes her liability for the
additions to tax under I.R.C. § 6654 as
determined in the notice of deficiency.
16. Petitioner concedes that the adjustments made
in the statutory notice of deficiency are in
all respects complete and correct.
17. Petitioner is not entitled to any of the
deductions listed in her petition.
This case was calendared for trial at a prior trial
session of the Court. Petitioner appeared at the call
of the prior calendar and moved for a continuance, citing
her own illness, her son's illness, and the fact that her
accountant was "about 95 percent finished" preparing her
1992 and 1993 Federal income tax returns. The Court
granted petitioner's motion for continuance but pointed
out to petitioner that respondent's requests for admissions
"are deemed to be facts under our rules and you didn't
respond to them." In response, petitioner did not advance
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any reason why the matters set forth in respondent's
request for admissions should not be deemed admitted
pursuant to Rule 90(c).
Petitioner did not appear when her case was called at
the instant trial session in Philadelphia, Pennsylvania,
on May 18, 1998. Respondent appeared through counsel
and filed a motion to dismiss for lack of prosecution.
Respondent's motion appeared meritorious; nevertheless,
the Court ordered the case to be recalled on the following
day to "give petitioner another opportunity to appear".
On the following day, petitioner did not appear initially
when her case was called, and the Court orally granted
respondent's motion to dismiss for lack of prosecution.
Shortly thereafter, petitioner appeared and asked the
Court to vacate the dismissal of her case. She stated
that she had prepared a delinquent return for 1992, one
of the 2 years in issue, that showed an overpayment of
$1,545.63. Petitioner did not proffer a return for 1993,
but she represented that "the same is true [i.e., that
there is an overpayment] * * * with respect to 1993."
She asked the Court to allow her "to file the returns
and have the Internal Revenue examine them and make sure
that they are accurate." Petitioner also claimed to have
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documentation to substantiate her position that respondent
had overstated her income in the notice of deficiency.
Respondent's counsel objected to petitioner's motion
to vacate the dismissal of her case and argued that
petitioner had failed to properly prosecute her case.
Furthermore, respondent argued that the Court should not
vacate its dismissal because, based upon the deemed
admissions, the Court would be required to reach the same
result. Respondent argued that petitioner is deemed to
have admitted all of the facts necessary for decision in
respondent's favor.
The Court accepted petitioner's explanation and
vacated the granting of respondent's motion to dismiss for
lack of prosecution, whereupon, respondent made an oral
motion for summary judgment based upon petitioner's
admissions, quoted above. The Court took respondent's
motion under advisement but stated that it would recall the
case in approximately 3 days in order to give petitioner
another opportunity to meet with respondent's agents and to
present her returns and documentation to them, so that her
correct tax liability could be computed. In effect, the
Court gave petitioner the relief she had requested.
Nevertheless, petitioner failed to meet with respondent's
agents. She has also failed to file an objection to
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respondent's motion for summary judgment or any other
pleading with the Court.
The Court may grant summary judgment "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). The party
opposing the motion may not rest upon mere denials, but
"must set forth specific facts showing that there is a
genuine issue for trial." Rule 121(d). However, the
moving party, respondent in this case, bears the burden of
proving there is no genuine issue of material fact and that
a decision may be rendered as a matter of law. Jacklin v.
Commissioner, 79 T.C. 340, 344 (1982); Espinoza v. Commis-
sioner, 78 T.C. 412, 416 (1982).
The first issue for decision is whether petitioner
is liable for the deficiencies determined by respondent
for 1992 and 1993. Petitioner is deemed to have admitted
that the deposits to her bank accounts in the amount of
$104,090.44 in 1992 and $101,558 in 1993 are includable
in gross income, and she "is not entitled to any of the
deductions listed in her petition." Based thereon, we
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sustain respondent's determination of a tax deficiency
for 1992 of $36,284.
With respect to 1993, we note that the tax deficiency
determined by respondent, $38,134, is based upon gross
receipts from petitioner's business or profession in the
amount of $103,328. However, petitioner is deemed to have
admitted receiving gross receipts of $101,558, $1,770 less
than the amount determined in the notice of deficiency.
Respondent concedes that the tax deficiency and additions
to tax for 1993 should be based upon the gross receipts
admitted by petitioner, $101,558. At the hearing of
respondent's motion, respondent submitted a recomputation
of the tax and additions to tax for 1993 based upon the
gross receipts admitted by petitioner. Respondent's
recomputation was filed as computation in support of the
motion for summary judgment. Petitioner did not object
to respondent's recomputation. Accordingly, in conformity
with respondent's recomputation, we find that the
deficiency in petitioner's tax for 1993 is $37,439.
The next issue for decision is whether petitioner is
liable for the addition to tax under section 6651(a)(1) for
failure to file timely Federal income tax returns for 1992
and 1993. Section 6651(a)(1) imposes an addition to tax
for failure to file a timely return, unless such failure
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is due to reasonable cause and not due to willful neglect.
United States v. Boyle, 469 U.S. 241, 243 (1985). Section
6651(a) imposes an addition to tax equal to 5 percent of
the tax required to be shown as tax on the return for every
month, or fraction thereof, that the return is late (not
to exceed 25 percent in the aggregate). Sec. 6651(a)(1).
Petitioner is deemed to have admitted that she did
"not file federal income tax returns for taxable years 1992
and 1993." She is also deemed to have admitted "liability
for the additions to tax under I.R.C. §§ [sic] 6651(a) as
determined in the notice of deficiency." Accordingly, we
sustain respondent's determination as to the additions to
tax under section 6651(a)(1). For 1992, the amount of the
addition is $9,071, the amount determined in the notice
of deficiency. For 1993, the amount of the addition is
$9,360, the amount set forth in respondent's recomputation.
The final issue for decision is whether petitioner
is liable for the additions to tax for failure to pay
estimated income tax under section 6654(a) for 1993.
Section 6654(a) imposes an addition to tax equal to the
amount of the underpayment multiplied by the underpayment
rate established under section 6621 for the period of the
underpayment. Respondent recomputed an addition to tax
under section 6654(a) of $1,553. The addition to tax under
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section 6654(a) is mandatory unless petitioner can prove
that she complies with one of the exceptions contained in
section 6654(e). Baldwin v. Commissioner, 84 T.C. 859,
871 (1985); Grosshandler v. Commissioner, 75 T.C. 1, 20-21
(1980).
Petitioner is deemed to have admitted "liability for
the additions [sic] to tax under I.R.C. sec. 6654 as
determined in the notice of deficiency." Accordingly, we
sustain respondent's determination as to the addition to
tax under section 6654. The amount of the addition is
$1,553, the amount set forth in respondent's recomputation.
To reflect the foregoing,
An order granting
respondent's oral motion for
summary judgment and decision
will be entered for respondent.