T.C. Memo. 2005-215
UNITED STATES TAX COURT
JAMES R. DOWNEY, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 20678-03. Filed September 14, 2005.
James R. Downey, pro se.
Jason M. Kuratnick, for respondent.
MEMORANDUM OPINION
MARVEL, Judge: This matter is before the Court on
respondent’s motion to dismiss for lack of prosecution. In a
notice of deficiency dated September 9, 2003, respondent
determined a deficiency in petitioner’s Federal income tax for
2000 of $43,828, and additions to tax for 2000 under section
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6651(a)(1)1 of $8,034.75, under section 6651(a)(2) of $4,463.75,
and under section 6654(a) of $1,872.10.
Background
Petitioner did not file a timely Federal income tax return
for 2000. By a notice of deficiency dated September 9, 2003,
respondent determined an income tax deficiency and additions to
tax under sections 6651(a) and 6654 with respect to petitioner’s
2000 taxable year.
On December 3, 2003, we filed petitioner’s petition
contesting respondent’s notice of deficiency for petitioner’s
2000 taxable year. Petitioner resided in Howell, New Jersey,
when his petition was filed. The petition cryptically asserts as
errors “1. Improper filing status” and “2. No deductions given
for family or home/mortgage/property tax.” The petition does not
assert that respondent’s determinations of petitioner’s gross
income or additions to tax for 2000 were in error.
On January 9, 2004, we filed respondent’s answer. In his
answer, respondent conceded the section 6651(a)(2) addition to
tax but alleged that the section 6651(a)(1) addition to tax
should be increased by $1,600 to $9,634.75.
On April 1, 2004, we issued a notice setting case for trial,
which set this case for trial during the Court’s September 7,
1
All section references are to the Internal Revenue Code in
effect for the year at issue, and all Rule references are to the
Tax Court Rules of Practice and Procedure.
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2004, trial session in Philadelphia, Pennsylvania. Accompanying
the notice was the Court’s standing pretrial order, which
directed the parties to begin preparing the case for trial or
settlement and warned the parties that “Continuances will be
granted only in exceptional circumstances.” The pretrial order
also ordered the parties to take specific steps to prepare for
trial and contained the following warning: “The Court may impose
appropriate sanctions, including dismissal, for any unexcused
failure to comply with this Order. See Rule 131(b).”
During a pretrial conference call held on August 24, 2004,
petitioner acknowledged that he had received the standing
pretrial order.
On June 15, 2004, respondent’s counsel sent petitioner a
letter in which he informed petitioner that his case was
scheduled for trial during the September 7, 2004, trial session,
explained the consequences of not appearing for trial, and set a
conference date for June 29, 2004. On June 21, 2004, respondent
received a letter from petitioner in which petitioner made
several arguments regarding the constitutionality of the Internal
Revenue Code and stated that he did not intend to appear at the
June 29 conference.
On June 24, 2004, respondent’s counsel sent petitioner
another letter and a proposed stipulation of facts. The letter
offered petitioner another opportunity for a conference to review
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the stipulation of facts. Petitioner did not request a
conference or execute the stipulation of facts.
On August 24, 2004, a conference call was held with the
parties regarding the pretrial preparation problems. During the
conference call, petitioner requested a continuance, ostensibly
to obtain counsel. Because of petitioner’s repeated failure to
respond to letters from respondent’s counsel, his refusal to
attend a stipulation conference and otherwise to cooperate in
preparing a stipulation of facts, and his failure to comply with
the Court’s standing pretrial order, we denied petitioner’s
request for a continuance but advised him that he could renew his
request for a continuance at the calendar call on September 7,
2004, if he took meaningful steps to obtain counsel and/or
demonstrated his willingness to cooperate in preparing his case
for trial.
Following the conference call, respondent’s counsel
attempted to contact petitioner by telephone without success. On
August 25, 2004, respondent’s counsel sent petitioner another
letter and another copy of the stipulation of facts.
Respondent’s counsel requested petitioner to contact him
regarding the stipulation of facts, but petitioner failed to do
so.
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On August 31, 2004, respondent’s counsel received a letter
and a “Notice of Appeal” from petitioner in which he again
requested a continuance.
On September 7, 2004, during calendar call, both
respondent’s counsel and petitioner appeared and were heard.
Respondent’s counsel reported that there had been no progress in
preparing the case for trial and that petitioner continued to
refuse to discuss a stipulation of facts. Petitioner stated that
he could not make any significant progress without counsel.
Respondent’s counsel requested that the case be set for trial
during the trial session, noting that petitioner had had
sufficient time to secure counsel and to prepare for trial. A
trial was set for September 10, 2004.
Subsequently, at petitioner’s request, the case was recalled
on September 7, 2004, for a pretrial conference. During the
pretrial conference, petitioner claimed that he had paid expenses
for a startup business during 2000 and that he had receipts for
the expenses, but he did not produce them. He also admitted that
he was employed as a technical manager for two companies, Enable
Vision and Geo Works, that he had received a salary from both
companies during 2000, and that he had received a Form W-2, Wage
and Tax Statement, from each company. Petitioner continued to
insist that he would not produce documents or appear for trial
without counsel.
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On September 10, 2004, the case was called for trial.
Petitioner did not appear. Respondent’s counsel represented to
the Court that he had spoken with petitioner on September 9,
2004, that petitioner had stated he would fax copies of his
documentation to respondent’s counsel, and that petitioner had
asked him to agree to a continuance. Respondent’s counsel told
petitioner that he would discuss the continuance with him on
September 10, 2004, but petitioner refused to appear on September
10, 2004. Respondent’s counsel advised petitioner that, if
petitioner did not appear, he would move to dismiss petitioner’s
case. Petitioner stated that he would fax his documentation to
respondent’s counsel, but the promised documentation was not
received.
On September 10, 2004, respondent submitted to the Court a
motion to dismiss for lack of prosecution, which was served by
mail on petitioner on September 10, 2004, and filed on September
13, 2004. On October 25, 2004, we received and filed
petitioner’s response to the motion to dismiss.
On March 7, 2005, we held a conference call with the parties
to discuss the case status and, particularly, a copy of what
purported to be petitioner’s Federal income tax return for 2000
that petitioner had mailed to the Court. Petitioner’s purported
2000 return did not include any of the wages that petitioner had
admitted receiving during 2000 and asserted a claim to an
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overpayment. During the conference call, petitioner confirmed
that he had not retained counsel or produced any documentation to
respondent concerning his 2000 income or expenses.
On March 14, 2005, we received a document from petitioner
entitled “MOTION FOR REDETERMINATION OF ZERO”, which we filed on
that date as petitioner’s Motion for Entry of Decision. In the
motion, petitioner alleges that on February 9, 2005, he had
submitted a Federal income tax return for 2000 to respondent that
“documented petitioner’s position in discovery of W-2 errors and
correcting the record regarding said W-2 errors concluding with a
zero tax liability.” By order dated March 16, 2005, we denied
petitioner’s motion.
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 that 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.
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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).
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 failing to appear for scheduled conferences, failing to
respond to respondent’s correspondence, and ignoring respondent’s
requests for production of records made it impossible for the
parties to exchange information, conduct negotiations, or prepare
and finalize a stipulation of facts before trial. Petitioner’s
multiple requests for continuance made less than 30 days before
the beginning of the September 7, 2004, trial session, which
failed to allege exceptional circumstances as required by Rule
133, further underscore what appears to have been an intentional
attempt on the part of petitioner to unreasonably delay the
proceedings. See Williams v. Commissioner, 119 T.C. 276, 279-280
(2002).
Petitioner was repeatedly warned by respondent’s counsel and
by the Court of the consequences of failing to prepare for trial
and of failing to appear at trial. Despite those warnings,
petitioner repeatedly failed to make any reasonable effort to
demonstrate his good faith and his willingness to prepare his
case for trial. Although petitioner asserted that he wanted to
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retain counsel to represent him in this case, petitioner did not
take meaningful steps to obtain counsel or to document any
attempt on his part to obtain counsel, although he had plenty of
opportunities to do so. We conclude from these circumstances
that petitioner’s claim that he intended to retain counsel was
simply another misguided attempt to avoid the reality of his tax
case.
Finally, although petitioner did appear at the calendar call
held on September 7, 2004, during which he argued yet again for a
continuance, the arguments that he made at that time ignored the
multiple warnings that he had received from the Court and
respondent’s counsel to demonstrate his willingness to prepare in
good faith for trial and to abide by the Court’s Rules and
standing pretrial order. Petitioner, who was well aware of the
trial date for his case, also failed to appear for trial. For
all of these reasons, we find that petitioner has failed to
comply with the Court’s Rules and orders and has failed properly
to prosecute this case. See Rollercade, Inc. v. Commissioner,
supra at 116-117.
Rule 34(b)(4) requires that a petition in a deficiency
action shall contain “clear and concise assignments of each and
every error” that the taxpayer alleges the Commissioner committed
in the determination of the deficiency and the additions to tax
in dispute. Rule 34(b)(5) requires that the petition contain
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clear and concise lettered statements of the facts upon which the
taxpayer bases the assignments of error. Funk v. Commissioner,
123 T.C. 213, 215 (2004); Jarvis v. Commissioner, 78 T.C. 646,
658 (1982). We deem the parties to concede any issue, including
additions to tax, not raised in the pleadings. Rule 34(b)(4);
Funk v. Commissioner, supra at 215; Jarvis v. Commissioner, supra
at 658 n.19.
In his petition, petitioner did not contest any of the
income items attributed to him in the notice of deficiency or
contest the additions to tax, and he conceded in open Court that
he received wages during 2000. Petitioner only contested the
filing status used by respondent in the notice of deficiency to
compute petitioner’s Federal income tax liability for 2000 and
the failure of respondent to allow any deductions for “Family or
home/mortgage/property tax.”2 Petitioner has not raised any
issue on which respondent has the burden of proof. See Rule
142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933)
(Commissioner’s determinations in the notice of deficiency are
presumed correct; taxpayer bears the burden of proving them
2
Respondent conceded during the pretrial conference that
petitioner was entitled to an itemized deduction for mortgage
interest of $11,413 in lieu of the standard deduction used in the
notice of deficiency. We shall require respondent to submit a
revised calculation of the income tax deficiency and additions to
tax and a proposed decision consistent with respondent’s
concession.
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wrong).3 Although respondent concedes that he has the burden of
proof with respect to the increased addition to tax under section
6651(a)(1), Rule 142, respondent has carried that burden of proof
by introducing into evidence certified copies of Form 4340,
Certificate of Assessments and Payments, with respect to
petitioner’s 2000 taxable year, establishing that petitioner did
not file a timely Federal income tax return for 2000, and by
petitioner’s failure to contest in his petition the items of
gross income that were reported on Forms W-2 and 1099 and
enumerated in the notice of deficiency. We also conclude that,
because petitioner is deemed to have conceded the issue of his
liability for the additions to tax by his failure to contest that
liability in his petition, respondent has no burden of production
under section 7491(c) with respect to the additions to tax. See
Funk v. Commissioner, supra; Swain v. Commissioner, 118 T.C. 358,
363-364 (2002).
To reflect the foregoing,
An appropriate order of
dismissal and decision will be
entered.
3
Because petitioner has not introduced any credible evidence
with respect to any factual issue and has failed to cooperate
with respondent’s requests for information, documents, and
meetings, the burden of proof does not shift to respondent. See
sec. 7491(a).