                         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.
                                - 3 -


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.
