                        T.C. Memo. 2000-124



                      UNITED STATES TAX COURT



            FATAI O. AND MARY T. KING, Petitioners v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 4373-99.                 Filed April 10, 2000.



     Fatai O. King, pro se.

     John R. Gilbert and Paul J. Sude, for respondent.



                        MEMORANDUM OPINION


     FOLEY, Judge:   By notice of deficiency dated December 7,

1998, respondent determined a $12,736 deficiency and a $2,547

section 6662(a) accuracy-related penalty relating to Fatai and

Mary King's 1995 Federal income tax.   In an amendment to the

answer, respondent asserted a section 6663(a) fraud penalty.     All
                               - 2 -

section references are to the Internal Revenue Code in effect for

1995.

     The Kings, who resided in Wyndmoor, Pennsylvania, when they

filed their petition, owned and operated a newsstand business.

After concessions, the remaining issues are whether petitioners

are entitled to a $12,554 section 179, and a $1,845 depreciation,

deduction relating to newsstand construction.   In support of

these deductions, petitioners presented the Internal Revenue

Service and the Court with canceled checks and an affidavit

purportedly from Leroy Lee, who, petitioners contended, did the

newsstand construction.   The checks had been altered, and the

affidavit was false, handwritten by Mr. King, and signed “Lee

Leroy” rather than “Leroy Lee”.

     When respondent mistakenly went to Mr. King’s business

address to serve a subpoena to Mr. Lee, Mr. King posed as Mr. Lee

and accepted service of the subpoena.    In response to Mr. Lee’s

testimony that he had worked only on petitioners’ home and did

not give Mr. King an affidavit, Mr. King testified that “Lee

Leroy” rather than “Leroy Lee” had worked on the newsstands, and

that Mr. Leroy “wasn’t coming” to testify.   Mr. King knowingly

submitted false and altered documents.   In addition, his

testimony was deliberately misleading, evasive, and untruthful.

     Petitioners are not entitled to the claimed deductions.     In

addition, Mr. King intentionally underreported taxable income and
                                 - 3 -

attempted to conceal, mislead, and prevent the collection of

taxes.   See Rowlee v. Commissioner, 80 T.C. 1111, 1123 (1983).

Accordingly, Mr. King is liable, pursuant to section 6663, for

the fraud penalty, but, pursuant to section 6662(b), petitioners

are not liable for an accuracy-related penalty.

     Respondent moved for a penalty pursuant to section 6673,

which provides that the Court may impose a penalty not in excess

of $25,000.   Petitioners’ position is manifestly frivolous and

groundless, see sec. 6673(a)(1)(B), and they have wasted the

resources of this Court.   We also note that this was the second

trial at which petitioners submitted altered documents to this

Court.   See King v. Commissioner, T.C. Memo. 1998-69, affd.

without published opinion 182 F.3d 903 (3d Cir. 1999).

Accordingly, the Court will impose a $5,000 penalty.

     Contentions not addressed are moot, irrelevant, or

meritless.

     To reflect the foregoing,



                                              An appropriate order will

                                         be issued, and decision will

                                         be entered under Rule 155.
