T.C. Memo. 2004-202
UNITED STATES TAX COURT
THOMAS G. BRENNER, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 8934-00. Filed September 2, 2004.
Thomas G. Brenner, pro se.
Monica J. Miller, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
JACOBS, Judge: Respondent determined deficiencies in
petitioner’s Federal income tax, delinquency additions to tax
- 2 -
under section 6651(a)(1) and (2),1 and estimated tax additions to
tax under section 6654 for 1991-97 as follows:
Additions to Tax
Sec. Sec. Sec.
Year Deficiency 6651(a)(1) 6651(a)(2) 6654
1991 $28,490 $7,123 no $1,628
1992 31,638 7,910 no 1,380
1993 38,905 9,726 no 1,630
1994 55,193 13,798 no 2,864
1994 53,544 13,386 no 2,903
1996 58,938 13,261 yes1 3,137
1997 63,330 14,249 yes1 3,388
1
Sec. 6651(a)(2) provides for an addition to tax
of 0.5 percent per month until payment, not to exceed
25 percent.
Respondent concedes that petitioner is not liable for the
addition to tax under section 6651(a)(2) for 1996-97. The issues
remaining to be decided are:
1. Whether the notice of deficiency is invalid because
respondent did not prepare a substitute for return for each of
the years at issue; and
2. if the notice of deficiency is valid, then
(a) whether respondent properly reconstructed
petitioner’s business income using the bank deposits method; and
(b) whether petitioner is liable for the additions to
tax under sections 6651(a)(1) and 6654.
1
Section references are to the Internal Revenue Code in
effect for the years at issue, and Rule references are to the Tax
Court Rules of Practice and Procedure. Amounts are rounded to
the nearest dollar.
- 3 -
FINDINGS OF FACT2
Petitioner resided in Ormond Beach, Florida, at the time the
petition in this case was filed.
During 1991-97, petitioner was in the insurance business.
He received the following income from commissions, interest,
dividends, and capital gain:
Year Commissions Interest Dividends Capital Gain
1991 $163,912 $438 -- --
1992 157,399 220 -- --
1993 230,581 173 $16 --
1994 215,378 177 20 --
1995 221,021 166 142 --
1996 261,240 131 1,424 $5,953
1997 342,891 118 2,157 9,551
Petitioner filed Federal income tax returns for all years
before 1991. He did not file returns for 1991-2001. Petitioner
did not make estimated tax payments for 1991-97, and no tax was
withheld with respect to any income petitioner earned during
those years.
In June 1998, the Internal Revenue Service began examining
petitioner’s records in order to determine petitioner’s income
tax liabilities for the years at issue. Petitioner refused to
meet with the examination officer. In addition, he refused to
2
Petitioner refused to execute a stipulation of facts. In
his answering brief, petitioner did not object to any of
respondent’s requested findings of fact and did not offer any of
his own. The record amply supports respondent’s requested
findings. Consequently, respondent’s requested findings of fact
are incorporated herein.
- 4 -
provide the examination officer with books, records, or any other
information, and he attempted to prevent the examination officer
from obtaining information from third parties. During the
examination, petitioner asserted his Fifth Amendment privilege
against self-incrimination.
The examination officer reconstructed petitioner’s insurance
business income using the bank deposits method. The examination
officer allowed petitioner a deduction for estimated insurance
business expenses equal to 54.77 percent of his commissions based
on the Statistics of Labor Bulletin, Sole Proprietorship Returns,
1994, Table 2.--Nonfarm Sole Proprietorships: Income Statements,
by Selected Groups: Insurance agents and brokers (statistics for
insurance agents).
On the basis of the examination officer’s reconstruction of
petitioner’s income, respondent determined deficiencies in
petitioner’s Federal income tax for 1991-97 and issued a notice
of deficiency for those years dated May 24, 2000.
On August 21, 2000, petitioner timely filed a petition in
this Court requesting that we “dismiss the NOD [notice of
deficiency] for lack of jurisdiction” on the alleged ground it
“lacks any ligament or tendon of fact, is clearly arbitrary and
capricious and no real determination of deficiency has been made
by any authorized IRS employee.” On September 29, 2000,
petitioner filed an amended petition claiming that respondent’s
- 5 -
determination that he had taxable income in the amounts stated in
the notice of deficiency was in error. In the amended petition,
petitioner asserted that the notice of deficiency was invalid
because “the Internal Revenue Service failed to execute an
involuntary return as required by the IR Code.”
On October 5, 2001, the Court sent the parties a notice
setting the case for trial at the trial session of the Court in
Jacksonville, Florida, beginning on March 11, 2002. Accompanying
that notice was the Court’s Standing Pre-Trial Order, which
states in pertinent part as follows:
Policies
You are expected to begin discussions as soon as
practicable for purposes of settlement and/or
preparation of a stipulation of facts. Valuation
cases and reasonable compensation cases are generally
susceptible of settlement, and the Court expects the
parties to negotiate in good faith with this objective
in mind. All minor issues should be settled so that
the Court can focus on the issue(s) needing a Court
decision.
* * * * * * *
If difficulties are encountered in communicating with
another party, or in complying with this Order, you
should promptly advise the Court in writing, with copy
to each other party, or in a conference call among the
parties and the trial judge.
If any unexcused failure to comply with this Order
adversely affects the timing or conduct of the trial,
the Court may impose appropriate sanctions, including
dismissal, to prevent prejudice to the other party or
imposition on the Court. Such failure may also be
considered in relation to disciplinary proceedings
involving counsel. See Rule 202(a).
- 6 -
Requirements
To effectuate the foregoing policies and an orderly and
efficient disposition of all cases on the trial
calendar, it is hereby
ORDERED that all facts shall be stipulated to the
maximum extent possible. All documentary and written
evidence shall be marked and stipulated in accordance
with Rule 91(b), unless the evidence is to be used to
impeach the credibility of a witness. Objections may
be preserved in the stipulation. If a complete
stipulation of facts is not ready for submission at
trial, and if the Court determines that this is the
result of either party’s failure to cooperate fully in
the preparation thereof, the Court may order sanctions
against the uncooperative party. Any documents or
materials which a party expects to utilize in the event
of trial (except for impeachment), but which are not
stipulated, shall be identified in writing and
exchanged by the parties at least 15 days before the
first day of the trial session. The Court may refuse
to receive in evidence any document or material not so
stipulated or exchanged, unless otherwise agreed by the
parties or allowed by the Court for good cause shown. *
* *
Petitioner served on respondent a document entitled
“Interrogatories, Requests for Admission and Production of
Documents”. On October 10, 2001, respondent filed a motion for
protective order. On October 11, 2001, we issued an order
granting respondent’s motion, in which we stated:
The attachment to respondent’s motion, which includes a
copy of a document that petitioner served on
respondent, entitled “Interrogatories, Requests for
Admission and Production of Documents”, contains
contentions and/or statements by petitioner that the
Court finds to be groundless and/or frivolous. The
Court reminds petitioner that section 6673(a)(1) of the
Internal Revenue Code states in pertinent part:
- 7 -
Whenever it appears to the Tax Court that --
(A) proceedings before it have been
instituted or maintained by the taxpayer
primarily for delay, (or)
(B) the taxpayer’s position in such
proceeding is frivolous or groundless, * * *
the Tax Court, in its decision, may require
the taxpayer to pay to the United States a
penalty not in excess of $25,000.
In the event that petitioner continues to advance
frivolous and/or groundless contentions and arguments,
the Court will be inclined to impose a penalty not in
excess of $25,000 on petitioner under section
6673(a)(1).
In an order dated February 4, 2002, the Court granted a
similar motion by respondent for a protective order. In that
order, petitioner was again cautioned that the Court would be
inclined to impose a penalty under section 6673(a)(1) if he
continued to advance frivolous and/or groundless arguments.
In December 2001, respondent served petitioner with
interrogatories and requests for the production of documents and
admissions. Petitioner’s answers to respondent’s requests for
production of documents, interrogatories, and admissions
indicated that he was asserting his Fifth Amendment privilege
against self-incrimination. Respondent filed motions to compel
production of documents, to compel responses to interrogatories,
and to review sufficiency of petitioner’s response to request for
admissions. A hearing on respondent’s motions was held on March
11, 2002, in Jacksonville, Florida. At the hearing, counsel for
- 8 -
respondent, after answering certain questions asked by the Court,
orally moved to be allowed to withdraw respondent’s motions and
that the case be continued. The Court granted respondent’s
motion.
On October 10, 2002, the Court sent the parties a notice
setting this case for trial at the trial session of the Court in
Jacksonville, Florida, beginning on March 3, 2003. Accompanying
that notice was the Court’s Standing Pre-Trial Order.
On January 9, 2003, petitioner filed a motion for summary
judgment in which he asserted that he was entitled to judgment as
a matter of law because respondent failed to prepare substitutes
for returns. In respondent’s response to petitioner’s motion for
summary judgment, respondent, citing Schiff v. United States, 919
F.2d 830 (2d Cir. 1990), Roat v. Commissioner, 847 F.2d 1379,
1381 (9th Cir. 1988), and Hartman v. Commissioner, 65 T.C. 542
(1975), asserted that section 6211(a) does not require the
Commissioner to prepare a substitute for return before
determining a deficiency and issuing a notice. Petitioner’s
motion for summary judgment was denied.
The trial in this case was held in Jacksonville, Florida, on
March 4, 2003. Petitioner took the stand but refused to testify
as to any facts relevant to his Federal income tax liabilities.
Petitioner stated that he feared that any statements he might
make could be used by the Government in a subsequent criminal
- 9 -
trial. Petitioner refused to answer the sole question asked on
cross-examination, asserting his Fifth Amendment privilege
against self-incrimination.
Respondent called several witnesses who established that,
during the years at issue, petitioner received substantial
commissions from various insurance companies. Respondent
introduced bank records to establish the total amounts that
petitioner had deposited in his bank accounts. Respondent called
Revenue Agent Glenn Dugger, who was not involved in the original
examination of petitioner’s income, to testify how petitioner’s
income was reconstructed using the bank deposits method.3
Revenue Agent Dugger had reviewed the original bank deposits
analysis and concluded that, giving petitioner the benefit of the
doubt, more of the deposits should have been treated as nonincome
transfers between accounts. He deducted those deposits from the
total deposit amount. Revenue Agent Dugger calculated
petitioner’s insurance business expenses at 54.77 percent of his
commissions on the basis of the Department of Labor statistics
for insurance agents. Revenue Agent Dugger calculated
petitioner’s insurance commissions and expenses for the years at
issue to be as follows:
3
The examination officer who originally conducted the bank
deposits analysis had retired on disability following a stroke
and was unavailable to testify at the trial in this case.
- 10 -
Year Commissions Expenses
1991 $163,912 $89,775
1992 157,399 86,208
1993 230,581 126,289
1994 215,378 117,962
1995 221,021 121,053
1996 261,240 143,081
1997 342,891 187,801
Petitioner did not challenge Revenue Agent Dugger’s
reconstruction of his income.
OPINION
A. Validity of Notice of Deficiency
Petitioner’s primary contention is that the notice of
deficiency is invalid because respondent did not prepare a
substitute for return for each of the years at issue. We
disagree.
If the Secretary determines a deficiency in income tax, he
is authorized to send to the taxpayer a notice of deficiency by
certified or registered mail before assessing the deficiency.
Secs. 6212(a), 6201(a). Under section 6211(a), the term
“deficiency” is generally defined as the amount of tax imposed
less the amount shown as the tax by the taxpayer upon his return.
See Laing v. United States, 423 U.S. 161 (1976).
Where a taxpayer fails to file a return, section 6020(b)
allows the Secretary (or the District Director or other
authorized internal revenue officer or employee, sec.
301.6020-1(b)(1), Proced. & Admin. Regs.) to prepare a substitute
- 11 -
for return “from his own knowledge and from such information as
he can obtain through testimony or otherwise.” This section,
however, is permissive, not mandatory. United States v.
Stafford, 983 F.2d 25, 27 (5th Cir. 1993); Roat v. Commissioner,
supra at 1381. Thus, although section 6020(b) allows the
Commissioner to prepare a substitute for return for a nonfiling
taxpayer, it is firmly established that section 6211(a) does not
require the Commissioner to prepare a substitute for return
before determining a deficiency and issuing a notice. Geiselman
v. United States, 961 F.2d 1, 5 (1st Cir. 1992); Schiff v. United
States, supra at 832; see also Roat v. Commissioner, supra at
1381-1382 (even when a substitute for return is prepared for a
taxpayer, the Commissioner need not use that “return” in
determining the taxpayer’s deficiency under section 6211(a)).
As section 6211(a) makes plain, only “if a return was made
by the taxpayer” does the tax shown on a return figure in the
Commissioner’s determination of a deficiency. When a taxpayer
fails to file a return, as petitioner here, “it is as if he filed
a return showing a zero amount for purposes of assessing a
deficiency.” Schiff v. United States, supra at 832. In such a
case the deficiency is “the amount of tax due.” Laing v. United
States, supra.
Petitioner argues that section 301.6211-1(a), Proced. &
Admin. Regs., is invalid because it is inconsistent with section
- 12 -
6211. We previously have held to the contrary; i.e., the
regulation is not an unreasonable interpretation of section 6211.
Spurlock v. Commissioner, 118 T.C. 155, 161 n.8 (2002). In so
holding, we noted that the Supreme Court cited the regulation in
Laing v. United States, supra at 174, stating: “Where there has
been no tax return filed, the deficiency is the amount of tax
due.”
Petitioner, having failed to file Federal income tax returns
for 1991-97, was sent a notice of deficiency by certified or
registered mail signed by the District Director. The notice
unquestionably meets the minimum requirements; respondent
properly “determined” the deficiency within the meaning of
section 6212(a). We hold that the notice of deficiency is valid.
We see no need to catalog petitioner’s remaining arguments,
covering topics ranging from communism to separation of church
and state, and painstakingly address them. As the Court of
Appeals for the Fifth Circuit has remarked: “We perceive no need
to refute these arguments with somber reasoning and copious
citation of precedent; to do so might suggest that these
arguments have some colorable merit.” Crain v. Commissioner, 737
F.2d 1417, 1417 (5th Cir. 1984).
B. Deficiencies and Additions to Tax
1. Deficiencies: Reconstruction of Income
Taxpayers bear the responsibility to maintain books and
- 13 -
records that are sufficient to establish their income. Sec.
6001; DiLeo v. Commissioner, 96 T.C. 858, 867 (1991), affd. 959
F.2d 16 (2d Cir. 1992); sec. 1.446-1(a)(4), Income Tax Regs.
When a taxpayer fails to keep adequate books and records, the
Commissioner is authorized to determine the existence and amount
of the taxpayer’s income by any method that clearly reflects
income. Sec. 446(b); Mallette Bros. Constr. Co. v. United
States, 695 F.2d 145, 148 (5th Cir. 1983); Webb v. Commissioner,
394 F.2d 366, 371-372 (5th Cir. 1968), affg. T.C. Memo. 1966-81;
see also Holland v. United States, 348 U.S. 121, 131-132 (1954).
Respondent employed the “bank deposits method” of
reconstructing petitioner’s income for the years at issue as a
means of calculating his tax liability. A bank deposit is prima
facie evidence of income, and the “use of the bank deposits
method for computing unreported income has long been sanctioned
by the courts.” Clayton v. Commissioner, 102 T.C. 632, 645
(1994); see also DiLeo v. Commissioner, supra at 868; Tokarski v.
Commissioner, 87 T.C. 74, 77 (1986); Estate of Mason v.
Commissioner, 64 T.C. 651, 657 (1975), affd. 566 F.2d 2 (6th Cir.
1977). The bank deposits method of reconstruction assumes that
all of the money deposited into a taxpayer’s account is taxable
income unless the taxpayer can show that the deposits are not
taxable. DiLeo v. Commissioner, supra at 868; see also Price v.
United States, 335 F.2d 671, 677 (5th Cir. 1964).
- 14 -
The Commissioner need not show a likely source of the income
when using the bank deposits method, but the Commissioner must
take into account any nontaxable items or deductible expenses of
which the Commissioner has knowledge. Price v. United States,
supra at 677; Tokarski v. Commissioner, supra at 77. If the
taxpayer contends that the Commissioner’s use of the bank
deposits method is unfair or inaccurate, the burden is on the
taxpayer to show the unfairness or inaccuracy.4 Price v. United
States, supra at 677; see also Rule 142(a); Welch v. Helvering,
290 U.S. 111 (1933).
Given that petitioner failed to file Federal income tax
returns for the subject years, and that he refused to cooperate
with the examination officer in the audit of his Federal income
tax liability for those years, we consider it proper for
respondent to reconstruct petitioner’s income for the subject
years using the bank deposits method. Revenue Agent Dugger
adequately explained how petitioner’s income was computed.
Petitioner had an opportunity to show error in respondent’s
computations, e.g., that some or all of the deposits represented
4
Sec. 7491, which is effective for court proceedings arising
in connection with examinations commencing after July 22, 1998,
shifts the burden of proof to the Commissioner in certain
circumstances and places on the Commissioner the burden of
production with respect to penalties and additions to tax. Sec.
7491 is inapplicable in this case because the examination of
petitioner’s 1991-97 tax years commenced in June 1998.
- 15 -
nontaxable income and/or he was entitled to additional
deductions, but he failed to take advantage of that opportunity.
Petitioner did not present at trial even a scintilla of
evidence to prove error in respondent’s computations. Petitioner
chose, instead, to assert the Fifth Amendment privilege against
self-incrimination. Assuming this was a valid assertion of the
privilege, it is not a substitute for evidence and is not
“intended to be * * * a sword whereby a claimant asserting the
privilege would be freed from adducing proof in support of a
burden which would otherwise have been his.” United States v.
Rylander, 460 U.S. 752, 758 (1983); Tweeddale v. Commissioner,
841 F.2d 643, 645 (5th Cir. 1988), affg. T.C. Memo. 1987-197;
Petzoldt v. Commissioner, 92 T.C. 661, 684 (1989). In a civil
tax case, the taxpayer cannot avoid the burden of proof by
asserting the Fifth Amendment privilege. United States v.
Rylander, supra at 758; see Steinbrecher v. Commissioner, 712
F.2d 195, 198 (5th Cir. 1983), affg. T.C. Memo. 1983-12;
Traficant v. Commissioner, 89 T.C. 501 (1987), affd. 884 F.2d 258
(6th Cir. 1989); Wheelis v. Commissioner, T.C. Memo. 2002-102,
affd. 63 Fed. Appx. 375 (9th Cir. 2003).
In view of all the evidence, we hold that resort to the bank
deposits method was necessary to determine petitioner’s income
for the taxable years involved and that respondent properly
applied this method in determining that income. Therefore, we
- 16 -
sustain Revenue Agent Dugger’s computation of petitioner’s
unreported income.
2. Additions to Tax
a. Section 6651(a)(1)
Section 6651(a)(1) imposes an addition to tax for failing to
file timely a required Federal income tax return, unless it is
shown that the failure was due to reasonable cause and not
willful neglect. Petitioner was required to file Federal income
tax returns for each of the subject years. Secs. 6012, 6072.
Petitioner never asserted or presented any evidence
indicating that he filed one or more of the required returns.
Nor did he establish reasonable cause for his failure to do so.
Consequently, we hold that petitioner is liable for the addition
to tax under section 6651(a)(1). See United States v. Boyle, 469
U.S. 241, 245 (1985); Cluck v. Commissioner, 105 T.C. 324,
338-339 (1995).
b. Section 6654(a)
Section 6654 imposes an addition to tax on an underpayment
of estimated tax. This addition to tax is mandatory unless the
taxpayer establishes that one of the exceptions listed in section
6654(e) applies. Recklitis v. Commissioner, 91 T.C. 874, 913
(1988). Given that the record does not establish that any of the
referenced exceptions applies, we conclude that petitioner has
- 17 -
failed to meet his burden of proof and sustain respondent’s
determination as to this issue.
For the foregoing reasons, we hold that petitioner is liable
for deficiencies in Federal income taxes, as well as additions to
tax under sections 6651(a)(1) and 6654, for 1991-97.
C. Penalty Under Section 6673(a)
The Court may impose on a taxpayer a penalty of up to
$25,000 if the taxpayer instituted or maintained proceedings
primarily for delay, if the taxpayer’s position is frivolous or
groundless, or if the taxpayer unreasonably failed to pursue
administrative remedies. Sec. 6673. A taxpayer’s position is
frivolous “if it is contrary to established law and unsupported
by a reasoned, colorable argument for change in the law.”
Coleman v. Commissioner, 791 F.2d 68, 71 (7th Cir. 1986); Booker
v. Commissioner, T.C. Memo. 1996-261; see also Hansen v.
Commissioner, 820 F.2d 1464, 1470 (9th Cir. 1987) (trial court’s
finding that taxpayer should have known that claim was frivolous
allows for section 6673 penalty). A taxpayer’s failure to
provide the Commissioner with information requested and his
failure to offer evidence at trial pertaining to the substantive
issues raised in the notice of deficiency are evidence that a
suit in this Court was instituted primarily for delay. Stamos v.
Commissioner, 95 T.C. 624, 638 (1990), affd. without published
opinion 956 F.2d 1168 (9th Cir. 1992).
- 18 -
A review of the record in this case convinces us that
petitioner’s position in this proceeding is both frivolous and
groundless and that petitioner maintained and prolonged these
proceedings primarily for delay. In so ruling we take into
account all aspects of petitioner’s conduct in this case.
Petitioner’s initial petition lacks any explanation of the
basis of his disagreement with respondent and fails to comply
with Rule 31(a), which states that the purpose of the pleadings
is to give the parties and the Court fair notice of the matters
in controversy and the basis for their respective positions.
Petitioner’s amended petition avers no particular facts with
respect to respondent’s determination but, for the most part,
asserts that the notice of deficiency was invalid because
respondent failed to execute substitutes for returns. Petitioner
appeared to be intelligent and knew, or should have known, that
his arguments were contrary to well-established law and thus were
frivolous. Moreover, the Court repeatedly informed petitioner
that his claims were frivolous and warned him of possible
sanctions.
Rather than heed the warning of the Court, petitioner
elected to continue to proceed with time-worn tax protester
rhetoric. He filed his motion for summary judgment claiming that
respondent’s failure to file substitutes for returns invalidated
the notice of deficiency and, consequently, he was entitled to
- 19 -
judgment as a matter of law. In respondent’s response to
petitioner’s motion for summary judgment, respondent cited Schiff
v. United States, 919 F.2d 830 (2d Cir. 1990), Roat v.
Commissioner, 847 F.2d at 1381, and Hartman v. Commissioner, 65
T.C. 542 (1975). We denied petitioner’s motion for summary
judgment. Thus, petitioner had knowledge of well-established
authority that section 6211(a) does not require the Commissioner
to prepare a substitute for return before determining a
deficiency and issuing a notice. Petitioner, however, persisted
in his frivolous and groundless arguments through trial and his
answering brief, which consists mainly of hackneyed tax protester
rhetoric and rambling legalistic gibberish.
Petitioner unreasonably prolonged the proceedings by serving
on respondent and filing with the Court repetitious, groundless,
and frivolous documents. Petitioner was not interested in
disputing the merits of the deficiencies or the additions to tax.
Sua sponte, the Court holds that petitioner must pay a penalty
under section 6673(a)(1) for instituting these proceedings
primarily for delay and for taking groundless positions. See
Pierson v. Commissioner, 115 T.C. 576, 580 (2000); Jensen v.
Commissioner, T.C. Memo. 2004-120; Frey v. Commissioner, T.C.
Memo. 2004-87; Frank v. Commissioner, T.C. Memo. 2003-88;
Robinson v. Commissioner, T.C. Memo. 2003-77.
- 20 -
Petitioner’s Fifth Amendment privilege does not prevent us
from imposing the penalty. See, e.g., Cabirac v. Commissioner,
120 T.C. 163 (2003); Rodriguez v. Commissioner, T.C. Memo.
2003-105; Edwards v. Commissioner, T.C. Memo. 2002-169; Wheelis
v. Commissioner, T.C. Memo. 2002-102. We do not impose sanctions
on petitioner for refusing to testify, but rather for instituting
and maintaining these proceedings primarily for delay and
persisting in advancing arguments that are frivolous.
The Court’s time and resources have been wasted. Petitioner
was specifically warned by the Court of the likelihood of a
penalty under section 6673 if he persisted in his frivolous
arguments, and he has persisted. Petitioner could have avoided
the penalty we now award to the United States, and other people
should avoid it, by even the most minimal concern for settled
rules. Serious sanctions are necessary to deter petitioner and
others similarly situated; the penalty must be substantial for it
to have a deterrent effect. See Takaba v. Commissioner, 119 T.C.
285, 295 (2002) (citing Coleman v. Commissioner, supra at 71).
Consequently, a penalty under section 6673 will be awarded to the
United States in the amount of $15,000.
The amounts of the deficiencies resulting from the corrected
amounts of petitioner’s business income as conceded by respondent
- 21 -
using Revenue Agent Dugger’s computations will be calculated
pursuant to a Rule 155 computation.
Accordingly,
Decision will be entered under
Rule 155.