                         T.C. Memo. 1997-453



                       UNITED STATES TAX COURT



            LARRY C. GAMSBY, Petitioner v. COMMISSIONER
                 OF INTERNAL REVENUE, Respondent



     Docket No. 26224-95.                      Filed October 2, 1997.



     Larry C. Gamsby, pro se.

     Guy A. Bracuti and John C. Galluzzo, Jr., for respondent.



                         MEMORANDUM OPINION

     ARMEN, Special Trial Judge:    This matter is before the Court

on petitioner's Motion for Leave to File Motion to Vacate

Decision.   As explained in greater detail below, we shall deny

petitioner's motion.
                                 - 2 -


Background

     Larry C. Gamsby (petitioner) failed to file income tax

returns for the taxable years 1991 and 1992.        However, respondent

received Forms 1099-NEC from 2 payors indicating that petitioner

received nonemployee compensation in the amount of $24,910 and

$26,673 for the taxable years 1991 and 1992, respectively.

     Revenue Agent Joan Rice conducted an examination of

petitioner's tax liability for 1991 and 1992.          By letter dated

November 22, 1994, Revenue Agent Rice forwarded a copy of her

revenue agent's report to petitioner and advised petitioner that,

despite the Forms 1099-NEC filed with respondent, the facts

supported petitioner's contention that petitioner should be

classified as an employee for the taxable years in issue.

     On September 13, 1995, respondent issued a notice of

deficiency to petitioner.   In the notice, respondent determined

that petitioner was liable for deficiencies in and additions to

his Federal income taxes for 1991 and 1992 as follows:

                                         Addition to Tax
          Year      Deficiency           Sec. 6651(a)(1)1

          1991       $6,164                   $1,541
          1992        6,600                    1,650

Contrary to the conclusion reached by Revenue Agent Rice in her

report, respondent determined in the notice of deficiency that

     1
        All section references are to the Internal Revenue Code,
as amended; all Rule references are to the Tax Court Rules of
Practice and Procedure.
                                 - 3 -


petitioner was liable for self-employment tax in respect of the

nonemployee compensation reported to respondent on the previously

mentioned Forms 1099-NEC.

     Petitioner filed an imperfect petition, followed by an

amended petition, in which he contested liability for self-

employment tax, as well as the amount of the compensation

reportedly paid to him for the taxable years 1991 and 1992.         At

the time that the petition was filed, petitioner resided in

Thorndike, Massachusetts.

     By notice dated June 11, 1996, petitioner's case was set for

trial on September 3, 1996, in Boston, Massachusetts.        On August

6, 1996, Appeals Officer Richard Puzzo forwarded to petitioner a

proposed form of decision and an audit report.        The form of

decision included a reduction in the amount of the deficiencies

and additions to tax determined in the notice of deficiency, as

follows:

                                         Addition to Tax
           Year     Deficiency           Sec. 6651(a)(1)

           1991      $4,413                  $1,103
           1992       1,748                     437

The accompanying audit statement clearly revealed: (1) Respondent

computed the reduced deficiencies based on petitioner's receipt

of nonemployee compensation (albeit in lower amounts relative to

the amounts determined in the notice of deficiency); and (2) such

compensation was subject to self-employment tax.
                                - 4 -


     Petitioner and respondent executed the proposed form of

decision and submitted the same to the Court.     On September 5,

1996, the Court entered its decision utilizing the form of

decision furnished by the parties.

     Petitioner did not file a notice of appeal or a timely

motion to vacate or revise the decision.     Consequently, the

decision became final on Wednesday, December 4, 1996, 90 days

after it was entered.   Sec. 7481(a)(1).

     On July 14, 1997, petitioner filed his Motion for Leave to

File a Motion to Vacate Decision.    On August 11, 1997, respondent

filed a response in opposition to petitioner's motion.

     This matter was called for hearing at the Court's motions

session held in Washington, D.C., on August 20, 1997.     Counsel

for respondent appeared at the hearing and presented argument in

opposition to petitioner's motion.      Although petitioner did not

appear at the hearing, he did file a written statement with the

Court pursuant to Rule 50(c).

     Petitioner's Rule 50(c) statement includes allegations that

the decision entered in this case should be vacated based on

fraud on the Court as evidenced by the following: (1) Petitioner

executed the form of decision with the understanding that he

would be permitted to file an offer in compromise (based on doubt

as to collectibility) in respect of his tax liabilities for 1991

and 1992; and (2) contrary to the form of decision, Revenue Agent
                                - 5 -


Rice made a prior determination in her letter dated November 22,

1994, that petitioner should be classified as an employee, rather

than an independent contractor, for the taxable years 1991 and

1992.

Discussion

     Section 7481(a)(1) provides the general rule that a decision

of the Tax Court becomes final on expiration of the time to file

a notice of appeal.    Section 7483 provides that a notice of

appeal generally must be filed within 90 days after a decision is

entered.    However, the 90-day appeal period may be extended if

the taxpayer files a timely motion to vacate or revise the

decision.    Fed. R. App. P. 13(a).   Pursuant to Rule 162, a motion

to vacate or revise a decision must be filed within 30 days after

the decision is entered, unless the Court allows otherwise.

     As indicated, petitioner did not file a notice of appeal or

a timely motion to vacate or revise the decision.    Accordingly,

the decision became final on December 4, 1996.    See secs.

7459(c), 7481(a)(1).

     The Tax Court generally lacks jurisdiction to vacate a final

decision.    Abatti v. Commissioner, 859 F.2d 115, 117 (9th Cir.

1988), affg. 86 T.C. 1319 (1986); Lasky v. Commissioner, 235 F.2d

97, 100 (9th Cir. 1956), affd. per curiam 352 U.S. 1027 (1957).

The Court may vacate a final decision only in certain narrowly

circumscribed situations.    For instance, some courts have ruled
                                - 6 -


that this Court may vacate a final decision if the decision is

shown to be void, or a legal nullity, for lack of jurisdiction

over either the subject matter or the party, see Billingsley v.

Commissioner, 868 F.2d 1081, 1084-1085 (9th Cir. 1989); Abeles v.

Commissioner, 90 T.C. 103, 105-106 (1988); Brannon's of Shawnee,

Inc. v. Commissioner, 69 T.C. 999, 1002 (1978), or if the

decision was obtained through fraud on the Court.     See Abatti v.

Commissioner, supra; Senate Realty Corp. v. Commissioner, 511

F.2d 929, 931 n.1 (2d Cir. 1975); Stickler v. Commissioner, 464

F.2d 368, 370 (3d Cir. 1972); Casey v. Commissioner, T.C. Memo.

1992-672.   In addition, the Court of Appeals for the Fifth

Circuit has indicated that the Tax Court has the power in its

discretion, in extraordinary circumstances, to vacate and correct

a final decision where it is based on a mutual mistake of fact.

See La Floridienne J. Buttgenbach & Co. v. Commissioner, 63 F.2d

630 (5th Cir. 1933.   But cf. Harbold v. Commissioner, 51 F.3d

618, 621-622 (6th Cir. 1995).

     Petitioner contends that the decision in this case should be

vacated due to fraud on the Court.      In Abatti v. Commissioner,

supra at 118-119, the Court of Appeals for the Ninth Circuit

defined the phrase "fraud on the court" as "an unconscionable

plan or scheme which is designed to improperly influence the

court in its decision" or a fraudulent act that "prevents the

opposing party from fully and fairly presenting his case".     See
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Toscano v. Commissioner, 441 F.2d 930, 933 (9th Cir. 1971);

Kenner v. Commissioner, 387 F.2d 689, 691 (7th Cir. 1968).      A

party moving to vacate a final decision of the Tax Court bears a

heavy burden of particularized pleading and proof.   Abatti v.

Commissioner, supra at 118; Drobny v. Commissioner, 113 F.3d 670

(7th Cir. 1997), affg. T.C. Memo. 1995-209, and cases cited

therein.

     Petitioner alleges that the decision in this case reflects

fraud on the Court on the grounds that he was promised an

opportunity to file an offer in compromise (based on doubt as to

collectibility) for the taxable years 1991 and 1992 and that his

status as an employee was determined by Revenue Agent Rice during

the audit stage of the case.   Regarding the submission of an

offer in compromise, petitioner complains that he did not receive

the necessary forms until January 1997 and that Internal Revenue

Service personnel in Springfield, Massachusetts, refused to

assist him in submitting the offer in compromise without some

form of picture identification.

     Considering all of the facts and circumstances, we hold that

petitioner has failed to demonstrate that the decision entered in

this case is the result of fraud on the Court.2   Although


     2
          The fact that respondent may have credited an
overpayment of tax for another taxable year against petitioner's
tax liabilities for the taxable years in issue does not
constitute fraud on the Court. Sec. 6402(a).
                                - 8 -


petitioner may have executed the form of decision with the

understanding that he would be permitted to file an offer in

compromise, such an agreement is not reflected in the record

presented.   Moreover, even assuming that the parties agreed to

such a procedure, the filing of an offer in compromise based on

doubt as to collectibility, subsequent to entry of decision by

the Court, does not provide a basis for setting aside what is

otherwise a final decision.3

     Petitioner's contention that Revenue Agent Rice determined

petitioner's status as an employee during the audit stage of the

case is likewise misplaced.    The revenue agent's report that

petitioner relies on is not a determination that is binding on

either respondent or the Court.    See Casey v. Commissioner, 38

T.C. 357, 381 (1962); Wilson v. Commissioner, 16 B.T.A. 1280,

1285 (1929); Gilmartin v. Commissioner, T.C. Memo. 1973-247.      To

the contrary, respondent's final determination regarding

petitioner's tax liability for 1991 and 1992 is set forth in the

notice of deficiency dated September 13, 1995.    That notice

clearly indicates that respondent determined that petitioner is

liable for self-employment tax.

     In sum, the decision entered in this case is now final, and

petitioner has failed to persuade us that such decision

     3
          At the hearing on petitioner's motion, counsel for
respondent stated that petitioner was still free to file an offer
in compromise based on doubt as to collectibility.
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constitutes a fraud on the Court.    Therefore, it follows that we

lack jurisdiction to vacate the decision in this case.

     To reflect the foregoing,

                                         An order will be issued

                                 denying petitioner's Motion for

                                 Leave to File Motion to Vacate

                                 Decision.
