T.C. Memo. 2001-257
UNITED STATES TAX COURT
KEVIN H. MOTLEY, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 11824-99. Filed September 28, 2001.
Kevin H. Motley, pro se.
Katherine L. Kosar, for respondent.
MEMORANDUM OPINION
VASQUEZ, Judge: This case is before the Court on
respondent’s motion to dismiss for lack of prosecution pursuant
to Rule 123(b).1 By separate notices of deficiency, respondent
1
Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the years in issue, and
all Rule references are to the Tax Court Rules of Practice and
Procedure.
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determined the following deficiencies in and additions to
petitioner’s Federal income taxes:
Additions to Tax
Year Deficiency Sec. 6651(a)(1) Sec. 6654
1994 $27,797 $2,113.25 $327.11
1995 89,992 17,451.00 3,663.33
1996 28,908 2,666.25 459.75
Background
In the notices of deficiency, respondent determined, on the
basis of income reported by third-party payers, that petitioner
failed to report wage income, capital gains, interest income, and
dividend income. Respondent also determined additions to tax for
failure to timely file returns and failure to make estimated tax
payments.
On June 28, 1999, petitioner invoked the jurisdiction of
this Court by timely filing an imperfect petition. On July 1,
1999, the Court ordered petitioner to file an amended petition in
order to comply with the Rules of the Court as to the form and
content of a proper petition and enclosed the form with the
order. On September 3, 1999, petitioner filed the amended
petition on the form enclosed with the Court’s July 1, 1999,
order. At the time he filed the amended petition, petitioner
resided in Pepper Pike, Ohio.
In the petitions, petitioner averred, among other things,
that respondent’s determinations were erroneous “based upon the
actual capital gain calculation versus the use of gross proceeds
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from the sale as the gain; application of itemized deductions and
four additional standard deductions for dependent children.”
Petitioner further alleged that the capital gain for 1995 was
derived from “the sale of primary residence and the purchase of
the replacement house prior to the sale is [sic] does not create
a taxable event,” and the “examiner used the standard deduction
against * * * [his] withholdings.” Respondent, in the answer,
denied the assignment of errors alleged by petitioner and
attached complete copies of the notices of deficiency to the
answer.
On December 8, 2000, respondent invited petitioner to a
meeting to discuss the case pursuant to Branerton Corp. v.
Commissioner, 61 T.C. 691 (1974); however, petitioner neither
appeared at the meeting nor contacted respondent to reschedule.
On February 2, 2001, respondent again sent petitioner a
letter inviting him to a conference to discuss the case.
Respondent advised petitioner that if he failed to appear,
respondent would move to dismiss the case. Again, petitioner
neither appeared nor contacted respondent.
On February 26, 2001, respondent sent petitioner a third
letter inviting him to a conference to discuss the case. Again,
respondent advised petitioner that if he failed to appear,
respondent would move to dismiss the case, and petitioner neither
appeared nor contacted respondent.
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By notice dated October 25, 2000, the Court set this case
for trial at the Court’s Cleveland, Ohio, session beginning March
26, 2001. This notice specifically stated: “YOUR FAILURE TO
APPEAR MAY RESULT IN DISMISSAL OF THE CASE AND ENTRY OF DECISION
AGAINST YOU.” Although our standing pretrial order required
petitioner to submit a trial memorandum, he never did so.
On March 26, 2001, this case was called at the Court’s trial
calendar in Cleveland, Ohio. Petitioner did not appear. At that
time, respondent orally moved to dismiss for failure to prosecute
pursuant to Rule 123(b).
On March 27, 2001, the case was recalled, and respondent
filed a written motion to dismiss for lack of prosecution
pursuant to Rule 123(b). At that time, the Court held a hearing
regarding the motion to dismiss. Petitioner did not appear at
the hearing.
Discussion
I. Rule 123(b). Dismissal
The Court may dismiss a case and enter a decision against a
taxpayer for his failure properly to prosecute or to comply with
the Rules of this Court. Rule 123(b). Rule 123(b) generally
applies in situations where the taxpayer bears the burden of
proof.
II. Section 7491. Burden of Proof and Burden of Production
When this case was called for trial, respondent represented
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that he has the burden of production regarding the additions to
tax because the examination in this case began after July 22,
1998, but claimed that he does not bear the burden of proof on
any issue in this case. See Internal Revenue Service
Restructuring & Reform Act of 1998, Pub. L. 105-206, sec.
3001(c), 112 Stat. 685, 727 (providing that sec. 7491 is
applicable to court proceedings arising in connection with
examinations commenced after July 22, 1998); sec. 7491(a), (c).
A. The Deficiencies
As a general rule, the taxpayer bears the burden of proving
the Commissioner's deficiency determinations incorrect. Rule
142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933). Section
7491(a), however, provides that if a taxpayer introduces credible
evidence and meets certain other prerequisites, the Commissioner
shall bear the burden of proof with respect to factual issues
relating to the liability of the taxpayer for a tax imposed under
subtitle A or B of the Code.
Petitioner failed to appear and did not introduce any
evidence. Therefore, we conclude that the burden of proof is not
placed on respondent pursuant to section 7491(a). Accordingly,
we sustain respondent’s deficiency determinations.
B. Additions to Tax
Section 7491(c) provides that the Commissioner shall bear
the burden of production with respect to the liability of any
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individual for additions to tax. To meet his burden of
production, the Commissioner must come forward with sufficient
evidence indicating that it is appropriate to impose this
addition to tax.2 See Higbee v. Commissioner, 116 T.C. 438, 446
(2001).
In addition to filing the answer, respondent submitted, and
the Court received as evidence, petitioner’s transcripts of
account for 1994, 1995, and 1996. Respondent also called Appeals
Officer Steve Henstridge to testify about the additions to tax
determined by respondent.
1. Section 6651(a)(1). Failure To File
Section 6651(a)(1) imposes an addition to tax for failure to
file a return on the date prescribed (determined with regard to
any extension of time for filing), unless the taxpayer can
establish that such failure is due to reasonable cause and not
due to willful neglect. The transcripts of account indicate that
the Internal Revenue Service (IRS) did not receive returns from
petitioner for 1994, 1995, and 1996. Additionally, Appeals
Officer Henstridge testified that he reviewed petitioner’s
2
We do not decide herein whether the Commissioner could
meet the burden of production if he did not produce any evidence
when the taxpayer failed to appear for trial. For example, it
might be possible for the Commissioner to satisfy the burden of
production under sec. 7491(c) without presenting any evidence if
the answer contained “well-pleaded facts”. Smith v.
Commissioner, 91 T.C. 1049, 1056-1057, 1058-1059 (1988), affd.
926 F.2d 1470 (6th Cir. 1991). We, however, leave that decision
for another day.
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administrative file for the years in issue, and he concluded that
petitioner did not file returns and that there were no prepayment
credits to offset the tax petitioner owed. He also testified
that the administrative file did not contain any tax returns.
On the basis of the evidence, we find as a fact that
petitioner did not timely file his returns for the years in
issue. Petitioner did not present evidence indicating that his
failure to file was due to reasonable cause and not due to
willful neglect. Higbee v. Commissioner, supra at 446-447
(stating that the taxpayer bears the burden of proof regarding
reasonable cause). Accordingly, on this issue, we sustain
respondent’s determination.
2. Section 6654. Failure To Pay Estimated Tax
Section 6654 imposes an addition to tax for failure to pay
estimated income tax. The amount of the credit for withholding
is deemed to be a payment of estimated tax. See sec. 6654(g).
In calculating the additions to tax, the statutory notices
of deficiency, which respondent attached to the answer, give
petitioner credit for withholding for 1994, 1995, and 1996.
Additionally, Appeals Officer Henstridge testified that the IRS
had no record of petitioner’s making any estimated tax payments.
On the basis of the evidence, we conclude that respondent
has met his burden of production pursuant to section 7491(c)
regarding this issue. Thus, petitioner must come forward with
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evidence sufficient to persuade the Court that respondent’s
determination is incorrect or that an exception applies. Rule
142(a); Welch v. Helvering, supra at 115; see Higbee v.
Commissioner, supra at 447.
Petitioner failed to appear and did not introduce any
evidence. Accordingly, on this issue, we sustain respondent’s
determination.
C. Conclusion
We have sustained all of respondent's determinations.
Therefore, we will dismiss the case and enter a decision against
petitioner. Rules 123(b), 142(a); Welch v. Helvering, supra at
115.
To reflect the foregoing,
An appropriate order and
decision will be entered for
respondent.