T.C. Memo. 1999-322
UNITED STATES TAX COURT
MARITIME GRAIN AND TRADING, LIMITED, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 23181-97. Filed September 24, 1999.
Mehdi Gerami (an officer), for petitioner.
Nancy C. McCurley, for respondent.
MEMORANDUM OPINION
CHIECHI, Judge: Respondent determined the following
deficiencies in, and accuracy-related penalties under section
6662(a)1 on, petitioner's Federal income tax:
1
All 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.
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Year Deficiency Accuracy-Related Penalty
1989 $377,763 $75,553
1990 428,261 85,652
We must decide whether respondent's determinations for each
of the years at issue should be sustained. We hold that they
should.
This case was submitted fully stipulated. The several facts
that have been stipulated are so found.
Petitioner is a corporation organized under the laws of the
United Kingdom. At the time of the filing of the petition in
this case, petitioner's mailing address was in Los Angeles,
California.
Petitioner filed Form 1120F, U.S. Income Tax Return of a
Foreign Corporation, for each of its taxable years 1989 (1989
Form 1120F) and 1990 (1990 Form 1120F)2 and an amended Form 1120F
for its taxable year 1990 (1990 amended Form 1120F). In both its
1989 Form 1120F and its 1990 amended Form 1120F, petitioner
listed its address and the location of its books and records as
Los Angeles, California.
In completing its 1989 Form 1120F and its 1990 amended Form
1120F, petitioner was required to report items of income and
expense either in section I of that form entitled "Certain Gains,
Profits, and Income From U.S. Sources That Are NOT Effectively
2
The record does not include petitioner's 1990 Form 1120F.
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Connected With the Conduct of a Trade or Business in the U.S." or
in section II of that form entitled "Income Effectively Connected
With the Conduct of a Trade or Business in the U.S.". In both
its 1989 Form 1120F and its 1990 amended Form 1120F, petitioner
reported all of its items of income and expense in section II of
Form 1120F and none of those items in section I of that form.
In the notice of deficiency (notice) issued to petitioner,
respondent made adjustments with respect to certain of the items
of income and expense that petitioner reported in section II of
its 1989 Form 1120F and its 1990 amended Form 1120F. Respondent
also determined in the notice that petitioner is liable for the
accuracy-related penalty under section 6662(a) for each year at
issue because of negligence or disregard of rules or regulations
under section 6662(b)(1).
Petitioner bears the burden of proving that the
determinations in the notice are erroneous. See Rule 142(a);
Welch v. Helvering, 290 U.S. 111, 115 (1933). That this case was
submitted fully stipulated does not change that burden or the
effect of a failure of proof. See Rule 122(b); Borchers v.
Commissioner, 95 T.C. 82, 91 (1990), affd. 943 F.2d 22 (8th Cir.
1991).
In its brief, petitioner argues that it did not have income
for the years at issue which was effectively connected with the
conduct of a trade or business in the United States. It also
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advances numerous arguments in support of its position that the
determinations in the notice are erroneous. However, the record
is devoid of evidence that supports petitioner's arguments.
Based on our examination of the entire, albeit sparse,
record before us, we find that petitioner has failed to satisfy
its burden of showing error in any of respondent's determinations
in the notice.
To reflect the foregoing,
Decision will be entered for
respondent.