                       T.C. Memo. 2001-243



                     UNITED STATES TAX COURT



           GENNARO AND PATRICIA LABATO, Petitioners v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent*


     Docket No. 4781-99.                Filed September 18, 2001.


     Gennaro Labato, pro se.

     *
        On Feb. 23, 2001, this Court filed its opinion in Labato
v. Commissioner, T.C. Memo. 2001-40. It was not until June 27,
2001, that respondent submitted and the Court filed a Notice of
Bankruptcy, which advised the Court that on Dec. 28, 2000,
petitioner Patricia Labato filed a petition with the U.S.
Bankruptcy Court. On July 10, 2001, pursuant to 11 U.S.C. sec.
362(a)(8) (1994), the proceedings in this Court were stayed as to
petitioner Patricia Labato, stayed as to petitioner Gennaro
Labato, and the Court’s opinion was withdrawn by Order.

     On Sept. 7, 2001, respondent advised the Court that on Aug.
28, 2001, the Bankruptcy Court granted the Government’s motion to
lift the automatic stay as to petitioner Patricia Labato to
permit the proceedings in this case to proceed. On Sept. 11,
2001, this Court lifted the automatic stay as to petitioner
Patricia Labato and the stay as to petitioner Gennaro Labato.

     Except for this footnote, this opinion is unchanged from the
previous opinion withdrawn by Order dated July 10, 2001.
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     Ross M. Greenberg, for respondent.



                         MEMORANDUM OPINION

     PAJAK, Special Trial Judge: Respondent determined a

deficiency in petitioners' 1996 Federal income tax in the amount

of $3,462 and a section 6651(a)(1) addition to tax in the amount

of $866.   Unless otherwise indicated, 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.

     As admitted by petitioners in the Stipulation of Facts, with

respect to their untimely 1996 Federal income tax return, Mrs.

Labato underreported income from her employment by Marriott

International, Inc., and totally omitted income from Columbia

Park Medical Center; petitioners failed to report some of their

interest income from a bank; and each petitioner underreported

Social Security benefits each received in 1996.   Respondent

concedes that petitioners are not liable for the additional tax

of $2,118 on an early distribution from a qualified pension.

This Court must decide whether petitioners are liable for the

addition to tax under section 6651(a)(1) for failure to timely

file their tax return.
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     Some of the facts in this case have been stipulated and are

so found.   Petitioners resided in St. Cloud, Florida, at the time

they filed their petition.

     Gennaro Labato (petitioner) was incarcerated from August 16,

1996, to July 31, 1997.   Petitioner claimed that when the time

came to file their tax return, petitioner Patricia Labato (Mrs.

Labato) requested an extension of time to file because she was

hoping that petitioner would be released from jail shortly

thereafter.   Petitioner was not released when anticipated.   Mrs.

Labato never received a response from the IRS.   During

petitioner's period of incarceration, the IRS was aware that he

was being held in jail.   After his release from jail, petitioner

filed the return for 1996 on September 23, 1997.

     Respondent has no record of receiving from petitioners a

request for an extension of time to file.

     Petitioners contend that petitioner's incarceration and his

inability to gather documents were reasonable cause for their

failure to timely file their return.   Respondent contends that

petitioners had no reasonable cause for failing to timely file

their return.

     Section 6651(a)(1) imposes an addition to tax for failure to

file a Federal income tax return by its due date, determined with

regard to any extension of time for filing previously granted.

The addition equals 5 percent for each month that the return is
                                - 4 -


late, not to exceed 25 percent.    Sec. 6651(a)(1).    Petitioners

provided no evidence that they filed for an extension, while

respondent provided documentation establishing that an extension

request was not received.    Accordingly, we find that petitioners

never requested an extension.    Even if petitioners had requested

the extension of time to file, they would have received an

automatic 4-month extension which would have expired prior to the

time the return was actually filed in this case.      Sec. 1.6081-

4(a)(1), Income Tax Regs.    To extend the time to file further,

petitioners would have had to request another extension.

Petitioners did not claim they filed such an additional

extension.

       Additions to tax under section 6651(a)(1) are imposed unless

the taxpayer establishes that the failure to file timely was due

to reasonable cause and not willful neglect.    Sec. 6651(a)(1) and

(2).    "Reasonable cause" requires the taxpayer to demonstrate

that he exercised ordinary business care and prudence.      United

States v. Boyle, 469 U.S. 241, 246 (1985); sec. 301.6651-1(c)(1),

Proced. & Admin. Regs.    Willful neglect is defined as a

"conscious, intentional failure or reckless indifference."

United States v. Boyle, supra at 245.

       The mere fact that petitioner was incarcerated at the time

his return was due is not reasonable cause, within the meaning of

section 6651(a)(1), for his failure to timely file.      Llorente v.
                                - 5 -


Commissioner, 74 T.C. 260, 268-269 (1980), affd. in part, revd.

in part on other grounds, and remanded 649 F.2d 152 (2d Cir.

1981); Veto v. Commissioner, T.C. Memo. 1993-557.         We also note

that Mrs. Labato was not incarcerated and could have filed on

time.    Petitioners failed to prove that they had reasonable

cause.    Accordingly, we find for respondent as to the addition to

tax under section 6651(a)(1).



                                             Decision will be entered

                                        under Rule 155.
