                             T.C. Memo. 1997-206



                          UNITED STATES TAX COURT



                    JANE C. BARBER, Petitioner v.
            COMMISSIONER OF INTERNAL REVENUE, Respondent



       Docket No. 12617-95.               Filed May 5, 1997.



       Jane C. Barber, pro se.

       James M. Guiry, for respondent.



                  MEMORANDUM FINDINGS OF FACT AND OPINION


       WELLS, Judge:     Respondent determined the following

deficiency in, and additions to, petitioner's 1992 Federal income

tax:

                                    Additions to Tax
       Deficiency             Sec. 6651(a)        Sec. 6654(a)

        $14,504                  $3,626              $631.77
                                 - 2 -

By amendment to her answer, respondent asserted the following

increased amounts of deficiency and additions to tax for that

year:

                                   Additions to Tax
     Deficiency             Sec. 6651(a)        Sec. 6654(a)

        $28,015                $5,185               $786

     For the year in issue, petitioner has stipulated the amounts

of income, gain, deduction, loss, and credit properly reportable

by her and concedes her liability for the addition to tax for

failure to pay estimated tax.     Accordingly, the only issue

remaining to be decided is whether petitioner is liable for      the

addition to tax for failure to file timely provided by section

6651(a).1

                           FINDINGS OF FACT

     Certain facts and the exhibits have been stipulated for

trial pursuant to Rule 91.     The parties' stipulations of fact are

incorporated herein by reference and are found as facts in the

instant case.     At the time the petition in the instant case was

filed, petitioner resided in Queensbury, New York.

     During 1992, petitioner was married to Robert Barber.      They

had three sons.    At that time, Mr. Barber was the developer of a

1
     Unless otherwise noted, all section references are to the
Internal Revenue Code as in effect for the year in issue, and all
Rule references are to the Tax Court Rules of Practice and
Procedure.
                               - 3 -

waste energy project and had contracts with certain counties.

Allegations of fraud with respect to those contracts were made,

and Mr. Barber was arrested on misdemeanor charges during early

1992.   In connection with the investigation of those allegations,

during August 1992, a search pursuant to a warrant was conducted

of the offices of Mr. Barber, Mr. Barber's and petitioner's

attorney, and their accountant.    Records were taken by the

district attorney who conducted the search, but petitioner did

not receive an inventory of the items taken.    Mr. Barber was

arrested on felony charges during December 1992.    Mr. Barber,

however, was not incarcerated as a consequence of his arrests.

Mr. Barber was tried twice, first during March 1993 on the

misdemeanor charges and subsequently during March and April 1994

on the felony charges.   Both trials resulted in acquittals.

     Petitioner suffered emotional trauma as a result of Mr.

Barber's arrests, his trials, and the attendant publicity;

however, she continued to function normally in caring for her

sons and household, doing what she felt she had to do.    Moreover,

petitioner was not hospitalized as a result of her trauma.

During that time, Mr. Barber also tried to continue his business,

which was adversely affected by the charges laid against him.

Mr. Barber, and his company did not file for bankruptcy and the

business subsequently recovered.

     During 1993, Forms W-2 reporting information concerning

wages earned during 1992 were received by petitioner, as well as
                               - 4 -

information reports of interest and pension and annuity income,

which were turned over to petitioner's and Mr. Barber's

accountant.   Petitioner also had discussions with their

accountant concerning the things she had to do.   During 1993,

however, petitioner put aside matters connected with the

preparation of her 1992 return because of the problems facing Mr.

Barber.

     After the end of the second trial in April 1994, petitioner

and Mr. Barber were able to begin reclaiming the documents that

had been taken in the August 1992 search.   Petitioner turned over

to their accountant the records relating to their affairs.    At

least by late 1994, petitioner had obtained the documents

necessary to prepare a 1992 Federal income tax return.

     Neither petitioner nor Mr. Barber requested an extension of

time to file a Federal income tax return for 1992.   Petitioner

did not timely file a Federal income tax return for her 1992

taxable year.   On November 22, 1995, over 7 months after the

issuance of the notice of deficiency in issue in the instant

case, petitioner and Mr. Barber submitted to respondent a joint

Federal income tax return for their 1992 taxable year.     Among the

items of income properly reportable by petitioner for her 1992

taxable year are:   Wages of $59,484, pension and annuity income

of $18,696, short-term capital gain of $57,012, and long-term

capital gain from the sale of a building of $121,556.
                                - 5 -

                               OPINION

     The only issue remaining for decision is whether petitioner

is liable for the addition to tax provided by section 6651(a) for

failure to file timely.   Petitioner concedes that she did not

file timely a Federal income tax return for her 1992 taxable

year.   As petitioner did not obtain an extension of time for

filing, that return was due on or before April 15, 1993.     Sec.

6072(a).

     Section 6651(a)(1) provides that, in the case of a failure

to file a tax return on the date prescribed for filing (including

any extension of time for filing), there shall be added to the

tax required to be shown on the return an amount equal to 5

percent of that tax for each month or fraction thereof that the

failure to file continues, not exceeding 25 percent in the

aggregate.   The addition to tax is mandatory unless it is shown

that the failure to file is due to reasonable cause and not

willful neglect.   Sec. 6651(a)(1); Estate of Cavenaugh v.

Commissioner, 100 T.C. 407, 426 (1993), affd. in part and revd.

in part on other grounds 51 F.3d 597 (5th Cir. 1995).

     Reasonable cause for delay is established where a taxpayer

is unable to file despite the exercise of ordinary business care

and prudence.    Bassett v. Commissioner, 67 F.3d 29, 31 (2d Cir.

1995), affg. 100 T.C. 650 (1993); sec. 301.6651-1(c)(1), Proced.

& Admin. Regs.   "Willful neglect" has been defined as a
                               - 6 -

"conscious, intentional failure or reckless indifference."

United States v. Boyle, 469 U.S. 241, 245 (1985); see also

Educational Fund of Elec. Indus. v. United States, 426 F.2d 1053,

1058 (2d Cir. 1970).   Whether a failure to file timely is due to

reasonable cause and not willful neglect is a question of fact.2

United States v. Boyle, supra at 249 n.8; Mayer's Estate v.

Commissioner, 351 F.2d 617 (2d Cir. 1965), affg. 43 T.C. 403

(1964); Crocker v. Commissioner, 92 T.C. 899, 913 (1989).

     Petitioner contends that her failure to file timely was due

to reasonable cause because of (1) the emotional trauma she

experienced as a result of the arrests of her husband, his

trials, and the attendant publicity, and (2) her belief that

records needed for the preparation of the return were unavailable

because they had been taken during the August 1992 search of the

offices of Mr. Barber and their accountant.   Mr. Barber also

suggested at trial that the return was not filed because they

could not afford to have necessary reports prepared.   Respondent

contends that petitioner was not incapacitated by that trauma,

2
    As our decision in the instant case has been made without
resort to the burden of proof, but instead rests on the evidence
submitted, the location of the burden of proof is immaterial.
Kean v. Commissioner, 91 T.C. 575, 601 n.40 (1988). Accordingly,
we do not need to explore the extent to which respondent bears
the burden of proof by reason of having amended her answer to
increase the amount of the addition to tax sought from
petitioner. Rule 142(a); see Sanderling, Inc. v. Commissioner,
66 T.C. 743, 757-758 (1976), affd. in part and revd. in part on
other grounds 571 F.2d 174 (3d Cir. 1978).
                                 - 7 -

that there was available to petitioner sufficient information to

prepare a timely return but that petitioner made no effort to do

so, and that financial difficulties do not excuse a failure to

file timely.

       It is well established that incapacity on the part of a

taxpayer due to mental or physical illness is reasonable cause

for failure to file timely.     Williams v. Commissioner, 16 T.C.

893, 906 (1951); Brown v. United States, 630 F. Supp. 57, 60

(M.D. Tenn. 1985); see also United States v. Boyle, supra at 248

n.6.    A mental or emotional disorder, however, does not excuse a

failure to file timely unless it is shown that the disorder

rendered the taxpayer incapable of exercising ordinary business

care and prudence during the period that the failure to file

continued.     Estate of Scull v. Commissioner, T.C. Memo. 1994-211;

Akins v. Commissioner, T.C. Memo. 1993-256, affd. without

published opinion 35 F.3d 577 (11th Cir. 1994); Farley v.

Commissioner, T.C. Memo. 1993-31.    Moreover, a taxpayer's

selective inability to meet his or her tax obligations when he or

she can carry on normal activities does not excuse late filing or

failure to file.    See Estate of McClanahan v. Commissioner, 95

T.C. 98, 101-102 (1990); Tabbi v. Commissioner, T.C. Memo. 1995-

463, and cases cited therein.

       Although, in the instant case, petitioner experienced

emotional trauma as a result of the arrests of her husband, the
                                 - 8 -

ensuing trials, and attendant publicity, she was able to carry on

normal activities, such as caring for her sons and maintaining

her family's household, and to do the things she felt she had to

do.   Moreover, petitioner was not hospitalized as a result of her

condition and presented no medical evidence documenting its

seriousness, relying solely on the testimony of herself and her

husband.   Furthermore, during relevant times, petitioner provided

tax information to, and discussed her obligations with, their

accountant, which suggests that she was cognizant of her

obligation to file and was capable of exercising ordinary

business care and prudence.     Although we are sympathetic to

petitioner's plight, we conclude that the emotional trauma she

suffered did not preclude her from conducting her affairs in a

manner that would justify relief from the addition to tax

provided by section 6651(a).

      Petitioner did not file a return for her 1992 taxable year

as soon as possible after the end of Mr. Barber's final trial but

waited to submit such a return until November 22, 1995,

approximately 19 months after the end of that trial and over 7

months after respondent issued a notice of deficiency to

petitioner.     We are persuaded that petitioner was not

incapacitated during the period that her failure to file a return

for her 1992 taxable year continued.     Williams v. Commissioner,

supra at 906.
                                - 9 -

     With respect to petitioner's second contention, we note

that, as a general matter, the unavailability of records is not

reasonable cause for failure to file timely.     Crocker v.

Commissioner, supra at 913.    A taxpayer is required to file

timely based on the best information available and thereafter to

file an amended return if necessary.     Estate of Vriniotis v.

Commissioner, 79 T.C. 298, 311 (1982).    Petitioner admits that

during 1993 she timely received Forms W-2 with respect to wages

earned and information reports of interest and pension and

annuity income received during 1992.    The only records that she

claims were not available at relevant times were those that had

been taken during the August 1992 search of her husband's and

their accountant's offices.    Petitioner's general testimony as to

the nature of the information contained in those records did not

identify any such information that was essential to the

preparation of her return.    Furthermore, she did not make any

effort either to gain access to those records for the purpose of

preparing her return or to obtain the information contained in

them from other sources.   Petitioner was required to make

reasonable estimates of amounts required to be shown on her

return based on the information available to her.     Electric &

Neon, Inc. v. Commissioner, 56 T.C. 1324, 1343 (1971), affd.

without published opinion 496 F.2d 876 (5th Cir. 1974).

Petitioner did not apply for an extension of time to file her
                              - 10 -

return for 1992 so as to gain more time to assemble the

information she claims to have needed in order to file.

     Moreover, petitioner admitted that, by late 1994, she had

obtained a sufficient number of the records to prepare a Federal

income tax return for 1992.   Accordingly, the delay in filing

subsequent to late 1994 cannot be attributed to the

unavailability of records.

     Lastly, financial difficulties generally do not constitute

reasonable cause for failure to file a return.     Jones v.

Commissioner, 25 T.C. 1100, 1106 (1956), revd. and remanded on

other grounds 259 F.2d 300 (5th Cir. 1958); Sanders v.

Commissioner, 21 T.C. 1012, 1019 (1954), affd. 225 F.2d 629 (10th

Cir. 1955).   Petitioner stipulated that, inter alia, wages of

$59,484, pension and annuity income of $18,696, short-term

capital gain of $57,012, and long-term capital gain from the sale

of a building of $121,556 are properly reportable by her for her

1992 taxable year.

     None of the circumstances on which petitioner relies

justifies relief from the addition to tax provided by section

6651(a).   Rather, it appears to us that petitioner simply put the

filing of that return aside because of matters she considered

more pressing and took no steps to prepare her return until

respondent acted to address her failure to file.    Indeed,

petitioner indicated in her testimony that, although she
                             - 11 -

discussed her obligations with her accountant, she put matters

connected with filing her tax return "on the back burner" and

dealt with matters she considered more pressing.   See Educational

Fund of Elec. Indus. v. United States, 426 F.2d at 1058; Throop

v. Commissioner, T.C. Memo. 1994-10.

     To reflect the foregoing,


                                        Decision will be entered

                                   for respondent.
