                            T.C. Memo. 2000-97



                          UNITED STATES TAX COURT



          XAVIER J.R. AND SULOCHANA D. AVULA, Petitioners v.
             COMMISSIONER OF INTERNAL REVENUE, Respondent



        Docket No. 8084-98.                      Filed March 21, 2000.



        Xavier J.R. Avula, pro se.

        John E. Budde and John A. Freeman, for respondent.



                            MEMORANDUM OPINION


        CHIECHI, Judge:    Respondent determined the following defi-

ciencies in, additions to, and accuracy-related penalties on

petitioners’ Federal income tax (tax) for the years 1991 through

1995:
                                          -2-

                                Additions to Tax          Accuracy-related Penalty
Year       Deficiency   Sec. 6651(a)(1)1   Sec. 6654(a)          Sec. 6662
1991         $6,451         $573.22           $94.66              $1,269.20
1992          3,965          418.10            42.37                 793.00
1993          5,693          744.22            87.69               1,105.60
1994         19,283        4,024.75           797.35               3,856.60
1995          3,760            --                --                  752.00

       The only issue remaining for decision is whether petitioners

are entitled to deduct for 1993, 1994, and 1995 certain claimed S

corporation losses.2

                                     Background

       Some of the facts have been stipulated and are so found.

       Petitioners resided in Rolla, Missouri, when they filed the

petition in this case.

       During the years at issue, petitioner Xavier J.R. Avula (Mr.

Avula) was employed at the campus of the University of Missouri

located in Rolla, Missouri.            During those years, petitioner


       1
      All section references are to the Internal Revenue Code in
effect for the years at issue. All Rules references are to the
Tax Court Rules of Practice and Procedure.
       2
      In the parties’ stipulation of facts and first supplemental
stipulation of facts, petitioners conceded certain determinations
in the notice of deficiency (notice). At the commencement of the
trial in this case, petitioner Xavier J.R. Avula informed the
Court that the only issue remaining for decision in this case
relates to the claimed S corporation losses. Petitioners pre-
sented no evidence and make no argument about, and do not other-
wise dispute, the remaining determinations in the notice that
have not been conceded by them in the parties’ stipulation of
facts and supplemental stipulation of facts. We conclude that,
except for the additions to tax determined under sec. 6654(a),
petitioners have abandoned contesting those other determinations.
See Rybak v. Commissioner, 91 T.C. 524, 566 n.19 (1988). As to
the additions to tax determined under sec. 6654(a), this Court
has no jurisdiction over such determinations. See sec.
6665(b)(2).
                                  -3-

Sulochana D. Avula (Ms. Avula) was employed as a technician at a

pharmacy.

     In October 1989, the State of Missouri authorized Interna-

tional Academy of Mathematical and Computer Modelling, Inc., to

conduct business as a not-for-profit corporation.      Petitioners own

100 percent of the stock of that corporation.     Effective January

1, 1991, the State of Missouri canceled the corporate license of

the International Academy of Mathematical and Computer Modelling,

Inc., because the corporation failed to file a correct annual

report with the secretary of state of Missouri.     In May 1999,

petitioners contacted the State of Missouri about the Interna-

tional Academy of Mathematical and Computer Modelling, Inc.      On

July 15, 1999, the International Academy of Mathematical and

Computer Modelling, Inc., became an active not-for-profit corpora-

tion.

     Petitioners filed a joint Federal tax return (return), Form

1040, for each of the years at issue on the date indicated:

                 Form 1040            Filing Date
                    1991             April 14, 1995
                    1992             April 17, 1996
                    1993            November 4, 1996
                    1994           November 22, 1996
                    1995            December 3, 1996

        Petitioners included a Schedule C, Profit or Loss From

Business (Schedule C), with each of their 1991 and 1992 returns.

Petitioners did not include a Schedule C with any of their returns
                                 -4-

for 1993, 1994, and 1995.   In Schedule C of their return for each

of the years 1991 and 1992, petitioners indicated that their

principal business or profession was consulting service, continu-

ing education, and publishing.   They further indicated in each

such Schedule that the name of their business was IAMCM and that

the employer identification number (EIN) for that business was 43-

1577193.

     Petitioners included a Schedule E, Supplemental Income and

Loss (Schedule E), with each of their 1993, 1994, and 1995 re-

turns.   In part II, Income or Loss From Partnerships and S Corpo-

rations, of each of those Schedules, petitioners claimed, inter

alia, that they had a loss from an S corporation.   They identified

that corporation as IAMCM in part II of Schedules E of their 1993

and 1994 returns and as IAMCM/PRINCIPIA in part II of Schedule E

of their 1995 return.   Petitioners further indicated in those

Schedules E that the EIN of that claimed S corporation was 43-

1577193, the same EIN of the business called IAMCM that they

identified in Schedules C of their 1991 and 1992 returns.

     During the examination in late 1996 by the Internal Revenue

Service (Service) of petitioners’ years at issue, the Service’s

examining agent (agent) requested copies of Forms 1120S for IAMCM.

The agent renewed his request in January 1997.

     In February and March 1997, petitioners prepared and mailed

to the agent a Form 1120S, U.S. Income Tax Return for an S Corpo-
                                  -5-

ration (Form 1120S), for IAMCM/PRINCIPIA for 1991 and Forms 1120S

for IAMCM for 1993 and 1994.    The EIN shown in each of those Forms

1120S was XX-XXXXXXX.    Petitioners did not prepare or file Forms

1120S for IAMCM/PRINCIPIA or IAMCM for 1992 or 1995.

     In April 1997, the agent advised petitioners about the rules

that require the filing of an election on Form 2553, Election by a

Small Business Corporation (Form 2553), in order for a small

business corporation to be treated as an S corporation.    No Form

2553 has been filed with respondent on behalf of IAMCM, IAMCM/

PRINCIPIA, or International Academy of Mathematical and Computer

Modelling, Inc.

     In the notice, respondent determined, inter alia, to disallow

the S corporation losses claimed in Schedules E of petitioners’

1993, 1994, and 1995 returns because “The election to be treated

as an S corporation (small business corporation) was determined to

be invalid.”

                               Discussion

     Petitioners used the same EIN for International Academy of

Mathematical and Computer Modelling, Inc., IAMCM, and IAMCM/

PRINCIPIA.     Thus, we conclude that those different names refer to

the same corporation.    For convenience, we shall hereinafter refer

to that corporation as IAMCM.

     Petitioners concede that IAMCM never filed Form 2553 with

respondent.    The record does not disclose that IAMCM otherwise
                                   -6-

attempted to make an election to be treated as an S corporation.

Nonetheless, petitioners argue that IAMCM should now be permitted

to make an S corporation election and that that election should be

retroactive to 1993, 1994, and 1995.     Respondent disagrees.

     A small business corporation generally may elect to be an S

corporation.   See sec. 1362(a).    Assuming arguendo, without

deciding, that IAMCM qualifies as a small business corporation as

defined in section 1361(b), it generally may make an election

under section 1362(a) to be an S corporation for any taxable year

at any time during the preceding taxable year or at any time

during the taxable year and on or before the 15th day of the third

month of the taxable year.3   See sec. 1362(b)(1).

     On the record before us, we find that IAMCM did not make a

timely and valid election to be treated as an S corporation for

any of the years 1993, 1994, and 1995 (or for either of the

remaining years at issue, 1991 and 1992).4    On that record, we



     3
      If a small business corporation makes an election under
sec. 1362(a) for any taxable year and that election is made after
the 15th day of the third month of the taxable year and on or
before the 15th day of the third month of the following taxable
year, such an election shall be treated as made for the following
taxable year. See sec. 1362(b)(3).
     4
      The record is devoid of evidence explaining why IAMCM did
not file Form 2553 with respondent within the time prescribed by
sec. 1362(b). At trial, Mr. Avula testified that, when the agent
informed him in April 1997 about the rules requiring a small
business corporation to file Form 2553 in order for it to be
treated as an S corporation, no such form was filed “for ethical
reasons”.
                               -7-

sustain respondent’s determinations to disallow the S corporation

losses claimed by petitioners for 1993, 1994, and 1995.5

     To reflect the foregoing and the concessions of petitioners,

                                     An appropriate order dismissing

                              this case for lack of jurisdiction

                              as to the additions to tax

                              determined under section 6654(a) and

                              decision for respondent will be

                              entered.




     5
      We have considered all of the contentions and arguments of
petitioners that are not discussed herein, and we find them to be
without merit and/or irrelevant.
