T.C. Memo. 2005-85
UNITED STATES TAX COURT
ARVIN E. MITCHELL, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 10988-03. Filed April 12, 2005.
Arvin E. Mitchell, pro se.
Russell K. Stewart, for respondent.
MEMORANDUM OPINION
MARVEL, Judge: This matter is before the Court on
respondent’s motion to dismiss for lack of prosecution. By
notice of deficiency, respondent determined the following income
tax deficiencies and additions to tax with respect to
petitioner’s Federal income taxes:
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Additions to tax
Year Deficiencies Sec. 6651(a)(1)
1998 $41,022 $10,255.50
2000 27,094 6,773.50
All Rule references are to the Tax Court Rules of Practice
and Procedure, and all section references are to the Internal
Revenue Code in effect for the years at issue.
Background
On July 10, 2003, we filed petitioner’s timely petition for
redetermination with respect to his 1998 and 2000 taxable years.1
Petitioner resided in Thorofare, New Jersey, when the petition
was filed in this case. The petition contains the following
allegations of error:2
Virtually all of the taxes shown should be excluded or
dismissed. There were procedural and legal issues in
the handling of my case that were never properly
addressed. These relate specifically to the
calculation of depreciation expense.
This case was first set for trial during the Court’s
1
Petitioner also sought a redetermination concerning 1997,
but no notice of deficiency for 1997 was attached to the
petition. By order dated Mar. 4, 2005, we directed petitioner to
show cause by Mar. 18, 2005, why his claim for relief with
respect to 1997 should not be dismissed for lack of jurisdiction.
Petitioner did not respond. By order dated Mar. 28, 2005, we
dismissed petitioner’s claim regarding 1997 for lack of
jurisdiction.
2
The petition does not contain a specific allegation
assigning error to respondent’s determination that petitioner is
liable for additions to tax under sec. 6651(a)(1). Because
petitioner did not contest the additions to tax in the petition,
they are deemed conceded in accordance with Rule 34(b)(4).
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February 9, 2004, Philadelphia, Pennsylvania, trial session. A
notice setting case for trial, dated September 4, 2003, and a
standing pretrial order were sent to petitioner. On January 15,
2004, petitioner moved for a continuance on the grounds that he
needed more time to negotiate a settlement with the Appeals
officer and to liquidate the assets necessary to satisfy any tax
liability resulting from the settlement. Petitioner’s motion for
continuance stated in part the following:
There are a litany of reasons for my request for
continuance. As a courtesy I will just specify one of
the main ones. * * *
I need a continuance in order to work out the
settlement. The glitch is in the payoff of the
settlement. If [the Appeals officer] * * * and I agree
on a “low-end” settlement amount then I can just give
him a check and the matter is concluded. If however
the settlement amount is near the high end of the
spectrum, I will have to pay using non-cash assets. It
can take several months to establish the value of these
assets since the potential buyers are scattered
throughout the country. [The Appeals officer’s] * * *
patience and flexibility in dealing with these asset
liquidation issues is material to settlement of the
case--for without these I would likely be motivated to
pursue the litigation option. The postponement of my
court date by at least several months would be ideal,
although I’m realistic enough to know you may have
limits.
Again, if you find this reason to be insufficient,
please notify me and I can have additional reasons
overnighted to you since there are so many reasons.
* * *
Respondent objected to the continuance, stating that petitioner
failed to attend every conference that counsel for respondent or
the Appeals officer had scheduled, after providing notice of his
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intention not to appear on the day before or the day of each
scheduled conference. Respondent stated that, as a result,
petitioner never discussed settling his case. Respondent further
explained that petitioner had never produced any documents since
his 1998 and 2000 taxable years were selected for examination,
and that petitioner had failed to comply with the Court’s
standing pretrial order requiring the production of documents and
preparation of a stipulation of facts.
In a written response to respondent’s reply to the motion
for continuance, a copy of which petitioner faxed to respondent,
petitioner advanced several other reasons for requesting the
continuance. Petitioner attributed his failure to meet with
respondent to “significant health issues” and explained that he
was unable to produce many of the relevant documents because of
“serious” problems with the personal computer on which the
documents were stored. Petitioner further stated that many of
the documents respondent requested disclosed the identities of
third parties and that, pursuant to confidentiality agreements,
disclosure of such information might subject petitioner to
liability for liquidated damages.
Before the February 9, 2004, trial session, petitioner met
with counsel for respondent but did not produce all of the
requested documents. The Court also received from petitioner a
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document dated February 5, 2004, which we filed as petitioner’s
supplement to petitioner’s motion for continuance, that stated in
part the following:
I unexpectedly came across some information that will
certainly satisfy my original continuance motion’s
requirement of extenuating circumstances or “compelling
reasons.” This new evidence will absolutely pass
muster with respect to justifying and legitimizing my
request for continuance. Therefore I request now
and/or I will do so in court next week (whichever is
appropriate), that I be granted a continuance in light
of the new evidence.
This new evidence is fairly involved and will be time-
consuming to present. Thus it is more practical and
useful that I do a “show and tell” as opposed to just
trying to verbally explain it to you. In fact, verbal
explanation alone will be useless.
I look forward to presenting the new evidence in court
next week.
On February 9, 2004, the day of the calendar call, petitioner
faxed a letter to the Court stating that he was physically unable
to appear in Court because of injuries he sustained in an
accident. Petitioner later provided documentation to establish
that he had been discharged from the hospital on the day before
the calendar call. By order dated February 13, 2004, the case
was continued generally.
The case was recalendared, and a notice dated April 1, 2004,
was sent to petitioner informing him that the case had been set
for trial during the Court’s September 7, 2004, Philadelphia,
Pennsylvania, trial session. The notice warned petitioner that
“YOUR FAILURE TO APPEAR MAY RESULT IN DISMISSAL OF THE CASE AND
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ENTRY OF DECISION AGAINST YOU.” A standing pretrial order dated
April 1, 2004, was also sent to petitioner, which specifically
stated that “The parties shall begin discussions as soon as
practicable for purposes of settlement and/or preparation of a
stipulation of facts”; “Continuances will be granted only in
exceptional circumstances”; and “The Court may impose appropriate
sanctions, including dismissal, for any unexcused failure to
comply with this Order.”
By letters dated May 26 and July 1, 2004, respondent
requested that petitioner produce documents to support his
position with respect to the deficiencies at issue, but
petitioner did not respond to the letters. On or about August
20, 2004, respondent mailed to petitioner copies of respondent’s
pretrial memorandum and respondent’s proposed motion to dismiss
for lack of prosecution.
On September 3, 2004, the Friday afternoon before the
September 7, 2004, calendar call, petitioner faxed to respondent
a motion for continuance and a response to respondent’s motion to
dismiss. On the day of the calendar call, the Court received by
overnight mail copies of petitioner’s motion for continuance and
response to respondent’s motion to dismiss, both of which we
filed on September 7, 2004. Petitioner cited medical problems as
the reason for his requesting a continuance but did not provide
any documentation to prove the existence of a medical condition
that would prevent him from attending the scheduled trial, other
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than his notarized statement asserting that the statements in the
motion for continuance regarding his health were true.
Petitioner’s motion for continuance further stated the following:
Though I will try, it is unlikely I will be able to
make it to trial next week. I have waited until this
time to request the continuance because I have been
going beyond the call of duty to take the steps that
would enable me to make it to trial, at least on a
part-time basis. Thus, up until now I fully hoped and
expected to make it in to trial.
Had the Respondent not waited until just two weeks ago
to contact me, Respondent would have learned of my
condition, probably from my family members in that I
have been sidelined by health issues and may not have
been able to follow-up on any communications from
Respondent.
* * * * * * *
Though it may be difficult, painful and/or may require
assistance from others, I should be able to respond to
any fax on the same day and I should be able to
overnight you anything you request.
On September 7, 2004, respondent’s counsel appeared at the
calendar call and presented a motion to dismiss for lack of
prosecution, which the Court filed. There was no appearance by
or on behalf of petitioner. On September 7, 2004, we denied
petitioner’s motion for continuance and scheduled a hearing on
respondent’s motion to dismiss for September 9, 2004.
On the afternoon of September 7, 2004, respondent’s counsel
faxed a letter to petitioner informing him that the Court had
scheduled a hearing on the motion to dismiss for September 9,
2004, and advising him that the Court was likely to dismiss the
case for lack of prosecution if he failed to appear at the
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hearing. Respondent’s counsel also called petitioner on
September 7 and 8, 2004, and left messages reiterating the
information set forth in the letter. On September 8, 2004, the
day before the hearing, petitioner faxed a letter to respondent’s
counsel indicating that his physicians had advised him to avoid
any physical activity that might aggravate his medical condition
and that he would call the Court in Washington, D.C., on the
following day to inform the Court as to whether he would appear
at the hearing. Petitioner did not provide any documentation
concerning the existence of a medical condition that would
prevent him from attending the hearing.
On September 9, 2004, the case was called for hearing.
There was no appearance by or on behalf of petitioner, but
petitioner had called the Court to state that he would not appear
at the hearing that afternoon. Counsel for respondent appeared
and presented oral arguments and produced documentary evidence in
support of the motion to dismiss. We took respondent’s motion to
dismiss under advisement.
Respondent’s motion to dismiss represents that: (1) All
material allegations of fact set forth in the petition in support
of the assignments of error have been denied in the answer; (2)
petitioner has not raised any issues upon which respondent has
the burden of proof, and respondent has not conceded any error
assigned in the petition; (3) petitioner has not produced any
evidence to support the assignments of error in the petition; and
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(4) petitioner has failed to respond to respondent’s letters
requesting that petitioner attend a conference and produce his
records for respondent’s review.
Petitioner requests that the Court deny respondent’s motion
to dismiss, alleging in his September 7, 2004, response to
respondent’s motion that
Had respondent not been less than diligent in his
prosecution of this case, even given my medical
situation there is a reasonable chance we could have
brought this case to closure. As it stands, Respondent
has clearly dropped the ball and it is only fair and
reasonable that I be relieved of further prosecution.
Discussion
The Court may dismiss a case at any time and enter a
decision against the taxpayer for failure properly to prosecute
his case, failure to comply with the Rules of the Court or any
order of the Court, or for any cause which the Court deems
sufficient. Rule 123(b). Dismissal is appropriate where the
taxpayer’s failure to comply with the Court’s Rules and orders is
due to willfulness, bad faith, or fault. Dusha v. Commissioner,
82 T.C. 592, 599 (1984). In addition, the Court may dismiss a
case for lack of prosecution if the taxpayer inexcusably fails to
appear at trial and does not otherwise participate in the
resolution of his claim. Rule 149(a); Rollercade, Inc. v.
Commissioner, 97 T.C. 113, 116-117 (1991); Smith v. Commissioner,
T.C. Memo. 2003-266, affd. sub nom. Hook v. Commissioner, 103
Fed. Appx. 661 (10th Cir. 2004).
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Petitioner has disregarded the Court’s Rules and standing
pretrial order by failing to cooperate meaningfully with
respondent to prepare this case for trial. Petitioner’s pattern
of canceling scheduled conferences, providing notice of his
intent not to attend shortly before each conference was to take
place, and ignoring respondent’s requests for production of
records made it impossible for the parties to exchange
information, conduct negotiations, or prepare a stipulation of
facts before trial. Petitioner also failed to prepare and submit
a pretrial memorandum before either of the scheduled trial
sessions, and he still has not produced all of the documents
relevant to his case. Petitioner intentionally attempted to
delay the proceedings by filing a motion for continuance before
the September 7, 2004, trial session. See Williams v.
Commissioner, 119 T.C. 276, 279-280 (2002). Petitioner’s motion
for continuance was filed less than 30 days before trial and
failed to verify the existence of any exceptional circumstances
that justified postponing the trial. See Rule 133. Moreover,
petitioner failed to appear at the September 7, 2004, calendar
call. Despite respondent’s attempts to contact petitioner about
the September 9, 2004, hearing and respondent’s warning that the
Court might dismiss the case if petitioner failed to attend,
petitioner did not appear at the hearing on September 9, 2004, or
provide proof of any legitimate reason for his failure to do so.
Petitioner’s allegations that he was unable to communicate
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with respondent or produce documents because of his medical
condition lack credibility because petitioner apparently had
access to a facsimile machine and managed to contact respondent
shortly before the September 7, 2004, trial session was scheduled
to begin. Moreover, petitioner’s arguments implying that
respondent has not diligently prosecuted this case are unfounded.
Respondent has given petitioner ample opportunity to participate
in the resolution of his claim and has contacted petitioner on
numerous occasions to inform him of the status of the case.
We find that petitioner has failed to comply with this
Court’s Rules and orders and has failed properly to prosecute
this case. See Rollercade, Inc. v. Commissioner, supra at 116-
117; Smith v. Commissioner, supra. Petitioner’s course of
conduct throughout the proceedings demonstrates that these
failures are due to petitioner’s willfulness, bad faith, or
fault, and we conclude that dismissal of this case is
appropriate. Petitioner has not raised any issue upon which
respondent has the burden of proof. See Rule 142(a); Welch v.
Helvering, 290 U.S. 111 (1933) (Commissioner’s determinations in
the notice of deficiency are presumed correct; taxpayer bears the
burden of proving them wrong).3
3
Because petitioner has not introduced any credible evidence
(continued...)
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Accordingly, we grant respondent’s motion to dismiss this
case for lack of prosecution, and we shall enter a decision
sustaining respondent’s determination of the deficiencies and
additions to tax as set forth in the notice of deficiency.
An appropriate order
of dismissal and decision
will be entered.
3
(...continued)
with respect to any factual issue and has failed to cooperate
with respondent’s requests for information, documents, meetings,
and interviews, the burden of proof does not shift to respondent.
See sec. 7491(a). In addition, respondent has no obligation
under sec. 7491(c) to produce evidence that the sec. 6651(a)(1)
additions to tax are appropriate because petitioner is deemed to
have conceded the additions to tax by failure to assign error to
the additions to tax in the petition. See Funk v. Commissioner,
123 T.C. 213 (2004); Swain v. Commissioner, 118 T.C. 358, 363-364
(2002).