                        T.C. Memo. 1999-139



                      UNITED STATES TAX COURT



            PAUL T. & CAROLYN JACKSON, Petitioners v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 11724-98.              Filed April 26, 1999.




     Robert T. Bennett, for respondent.



                        MEMORANDUM OPINION


     FOLEY, Judge:   By notice dated April 16, 1998, respondent

determined a $4,355 deficiency and a $3,266 section 6663 penalty

relating to petitioners' 1996 Federal income tax.   All section

references are to the Internal Revenue Code in effect for the

year in issue, and all Rule references are to the Tax Court Rules

of Practice and Procedure.
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     At trial, petitioners failed to appear, respondent made an

oral motion to dismiss for lack of prosecution the issues upon

which petitioners bore the burden of proof, and the Court granted

respondent's motion.   See Rule 149.   Respondent concedes that

petitioners are entitled to a $2,000 deduction relating to an

Individual Retirement Account contribution.    The remaining issue

for decision is whether petitioners are liable for a fraud

penalty.

                             Background

     Petitioners, husband and wife, resided in Raritan, New

Jersey, at the time their petition was filed.    During the year in

issue, Mr. Jackson received taxable income of $1,200 from Seton

Hall University and $2,599 from Berkeley College of New Jersey,

but did not give either school his correct Social Security

number. Petitioners failed to report this income on their 1996

Federal income tax return.

     In their petition, petitioners claimed that respondent had

accepted their 1996 return "as filed" and that a refund was due

to them.   Petitioners included with their petition a purported

Internal Revenue Service (IRS) letter supporting this claim.      The

letter was not written, or sent, by an IRS employee.

                             Discussion

     Respondent determined that petitioners are liable, pursuant

to section 6663, for a fraud penalty.     Respondent must establish
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by clear and convincing evidence that, for the year in issue, an

underpayment of tax exists and that some portion of the

underpayment is due to fraud.      See Petzoldt v. Commissioner, 92

T.C. 661, 699 (1989).    A taxpayer's attempts to conceal income,

mislead the IRS, or prevent the collection of income tax may

establish the requisite fraudulent intent.         See Rowlee v.

Commissioner, 80 T.C. 1111, 1123 (1983).

       Respondent has established that, for the year in issue, the

underpayment of tax was attributable to Mr. Jackson's fraud.         Mr.

Jackson received but failed to report on petitioners' 1996 tax

return, $3,799 of taxable income, resulting in an underpayment of

tax.    Mr. Jackson attempted to prevent the IRS from collecting

his income tax liability on this unreported income by providing

incorrect social security numbers to his employers.          See Hand v.

Commissioner, T.C. Memo. 1982-457 (holding that the use of false

social security numbers is evidence of fraudulent intent).         In

addition, Mr. Jackson persisted in his attempt to conceal income

by submitting to respondent and the Court a counterfeit letter.

Accordingly, Mr. Jackson is liable for the fraud penalty.

Respondent, however, has not established that Mrs. Jackson acted

with fraudulent intent.    Accordingly, Mrs. Jackson is not liable

for the fraud penalty.    See sec. 6663(c).

       To reflect the foregoing,


                                                Decision will be entered

                                           under Rule 155.
