                          T.C. Memo. 1999-215



                     UNITED STATES TAX COURT



          A. MUHSIN & B. JACKSON MUHSIN, Petitioners v.
           COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 22803-97.                         Filed July 1, 1999.



     A. Muhsin, pro se.

     Ruth Spadaro, for respondent.



                          MEMORANDUM OPINION


     PANUTHOS, Chief Special Trial Judge:       This case was heard

pursuant to section 7443A(b)(3)1 and Rules 180, 181, and 182.



     1
           Unless otherwise indicated, all section references are
to the Internal Revenue Code in effect for the years in issue.
All Rule references are to the Tax Court Rules of Practice and
Procedure.
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     Respondent determined a deficiency in petitioners' 1995

Federal income tax in the amount of $3,272 and an accuracy-

related penalty under section 6662(a) for negligence or

intentional disregard of rules or regulations in the amount of

$654.

     The issues for decision are as follows:

     (1)   Whether petitioners are entitled to certain claimed

itemized deductions.

     (2)   Whether petitioners are entitled to certain claimed

Schedule C deductions.

     (3)   Whether petitioners are entitled to an earned income

tax credit.

     (4)   Whether petitioners are liable for the accuracy-related

penalty under section 6662(a) for negligence or intentional

disregard of rules or regulations.

Background

     Petitioners resided in Trenton, New Jersey, at the time the

petition was filed.    In their amended petition, petitioners

assert the following:

     All the adjustments made are incorrect. IRS had no
     grounds for making any changes in my report as
     submitted. IRS had no reference and/or informations
     over and above my report to justify any claim(s) of
     deficiency.

     The amended petition was filed in this case on January 20,

1998.   Respondent's answer was filed February 2, 1998.   By notice
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dated August 12, 1998, this case was set for trial at a session

commencing in Philadelphia, Pennsylvania, on November 2, 1998.

At the calendar call, petitioner Abdus-Salaam Muhsin (petitioner)

appeared and orally moved for a continuance.   Respondent's

counsel advised that petitioners had not communicated and

cooperated with respondent's counsel.   The Court advised

petitioner of the requirement to communicate and cooperate with

respondent's representatives.   Also the Court was advised that

petitioner was in the process of talking with a representative of

the Villanova Tax Clinic.2   Based on these circumstances,

including the indication that petitioners would cooperate in an

attempt to settle and/or narrow the issues, the case was

continued from the November 2, 1998, Philadelphia, trial session.

     The matter was not resolved.   The case was again set for a

trial session beginning February 22, 1999, in Philadelphia.

Petitioner appeared at the calendar call and made an oral motion

to dismiss the case for lack of jurisdiction and, in the

alternative, a motion for a continuance.   The Court denied the

motions and set the matter for trial on the afternoon of February

22, 1999.   When the case was called for trial, petitioner and

counsel for respondent appeared.    Petitioner provided the Court


     2
        An attorney from the clinic advised the Court that he was
considering entering an appearance depending upon his
communications with petitioners. The clinic attorney did not
enter an appearance in this matter.
                                - 4 -


with a trial memorandum.    Petitioners enumerated seven numbered

issues in the memorandum, none of which related to the

adjustments in the notice of deficiency.    The issues set forth by

petitioners related to the authority of the Internal Revenue

Service (IRS) to proceed in this matter and the jurisdiction of

this Court.    Respondent's counsel advised the Court that

petitioners had failed to respond to attempted communications.

     Upon a review of petitioners' trial memorandum, the Court

advised petitioner that it was incumbent upon him to address the

adjustments set forth in the notice of deficiency.    The Court

explained that petitioners needed to present evidence, by way of

testimony or documents, with respect to the adjustments.     The

Court further explained that petitioners would be given a limited

opportunity to present argument relating to issues set forth in

their trial memorandum and that the Court might consider imposing

a penalty under section 6673(a)(1) if petitioners pursued

arguments that were primarily for delay or were frivolous or

groundless.

     A review of this record, which includes a copy of

petitioners' 1995 Federal income tax return and the notice of

deficiency dated August 27, 1997, reflects that petitioner is an

Islamic religious leader (an Imam) in the Trenton, New Jersey,

community.    Petitioner asserts that he travels to places of

worship and conducts visitations on a daily basis.    Petitioner
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reported gross receipts from this activity in the amount of

$3,121 and expenses of $7,923.    Petitioners also reported wages

of $30,322 and total itemized deductions of $13,734.      With

respect to the itemized deductions, respondent disallowed $4,211

of claimed charitable contribution deductions and $8,173 of

miscellaneous itemized deductions.       The above adjustments, which

caused an increase in the taxable income, resulted in a

computational adjustment reducing the earned income credit to

zero.

Discussion

     Petitioners, despite having been admonished by the Court,

did not present any evidence (documents or testimony) to support

entitlement to the claimed deductions.      As we have stated on many

occasions, deductions are a matter of legislative grace, and a

taxpayer bears the burden of proving that he is entitled to any

deductions claimed.   See INDOPCO, Inc. v. Commissioner, 503 U.S.

79, 84 (1992).   To the extent that petitioner suggests that the

IRS does not have the power to examine tax returns or that this

Court does not have jurisdiction, we see no need to refute such

arguments which have no colorable merit.      See Crain v.

Commissioner, 737 F.2d 1417 (5th Cir. 1984).       The Court of

Appeals for the Third Circuit indicated approval of Crain v.

Commissioner in Sauers v. Commissioner, 771 F.2d 64, 67 (3d Cir.

1985), affg. T.C. Memo. 1984-367; see also Matthews v.
                                - 6 -


Commissioner, T.C. Memo. 1995-577, affd. without published

opinion 106 F.3d 386 (3d Cir. 1996).    Since there is no evidence

in this record from which the Court can make findings as to

petitioners' claimed deductions, respondent's determination is

sustained.

     Respondent determined petitioners were liable for the

accuracy-related penalty under section 6662(a) for 1995.    The

accuracy-related penalty is equal to 20 percent of any portion of

an underpayment of tax required to be shown on the return that is

attributable to the taxpayer's negligence or disregard of the

rules or regulations.    See sec. 6662(a) and (b)(1).   "Negligence"

consists of any failure to make a reasonable attempt to comply

with the provisions of the Internal Revenue Code.    Sec. 6662(c).

"Disregard" consists of any careless, reckless, or intentional

disregard.    Id.

     It is the taxpayer's responsibility to establish he is not

liable for the accuracy-related penalty imposed by section

6662(a).    See Rule 142(a); Tweeddale v. Commissioner, 92 T.C.

501, 505 (1989).    Petitioner failed to explain adequately the

nature of his business and how claimed expenses related to that

business.    He further failed to present any evidence as to

itemized deductions.    On the basis of the entire record, we

conclude that petitioners have not established the underpayment

of tax was due to reasonable cause and that they acted in good
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faith.   Accordingly, we hold petitioners are liable for the

accuracy-related penalty.

     The Court hereby puts petitioners on notice that in any

future proceedings instituted by them primarily for delay, or

where their position in such proceeding is frivolous or

groundless, they will be subject to a penalty not in excess of

$25,000 pursuant to section 6673.

     To reflect the foregoing,

                                              Decision will be entered

                                         for respondent.
