                        T.C. Memo. 1999-363



                      UNITED STATES TAX COURT



              DOUGLAS MICHAEL RILEY, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 3896-98.                  Filed November 1, 1999.



     Douglas M. Riley, pro se.

     John Q. Walsh, for respondent.



              MEMORANDUM FINDINGS OF FACT AND OPINION


     GALE, Judge:   Respondent determined deficiencies in

petitioner’s Federal income tax, additions to tax, and penalties

as follows:
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                                 Additions to Tax          Penalty
                                Sec.          Sec.          Sec.
Year         Deficiency      6651(a)(1)    6651(a)(2)      6662(a)

1992          $10,407         $1,961           $1,961      $2,081
1993           12,378          2,284            1,675       2,476
1994            1,054            100               88           9
1995            1,496            337               67         299

In his answer, respondent asserted a claim for increased

additions to tax under section 6651(a)(1)1 of $218, $253, $109,

and $37 for 1992, 1993, 1994, and 1995, respectively.

       After concessions,2 we must decide the following issues:

       (1)    Whether petitioner is entitled to casualty loss

deductions during the years 1992 through 1995 for the loss of a

“nonviable fetus”.        We hold he is not.

       (2)    Whether petitioner is liable for additions to tax under

section 6651(a)(1).       We hold he is.

       (3)    Whether petitioner is liable for accuracy-related

penalties under section 6662(a).          We hold he is.



       1
       Unless otherwise noted, all section references are to the
Internal Revenue Code in effect for the years in issue, and all
Rule references are to the Tax Court Rules of Practice and
Procedure.
       2
       The parties have stipulated that petitioner received
unreported unemployment compensation during 1994 of $6,110. In
addition, respondent has conceded that petitioner is not liable
for additions to tax under sec. 6651(a)(2) for failure to pay for
any of the years in issue. Finally, respondent concedes that
petitioner is entitled to mortgage interest deductions for the
years 1992 through 1995 of $4,158, $5,644, $4,437, and $4,384,
respectively, to the extent those deductions exceed the standard
deductions for the years in issue.
                                - 3 -

     (4)   Whether petitioner is liable for a penalty under

section 6673 for maintaining a frivolous or groundless position

in these proceedings.    We hold he is.

                           FINDINGS OF FACT3

     At the time of filing the petition, petitioner resided in

Schaumburg, Illinois.    On December 16, 1996, petitioner filed

Forms 1040, U.S. Individual Income Tax Return, for the years 1992

through 1995.   Before that date, petitioner had not filed any tax

returns for those years.    For the years 1992 through 1995,

petitioner’s tax returns reported adjusted gross income of

$53,029, $60,406, $7,154, and $16,399, respectively.     In

addition, petitioner received unemployment compensation in 1994

of $6,110 that was not reported on his return for that year.

     Each of petitioner’s tax returns for the years in issue

included a Schedule A, Itemized Deductions, and a Form 4684,

Casualties and Thefts.    On each Form 4684, petitioner claimed a

casualty loss for a “nonviable fetus”.     For the years 1992

through 1995, petitioner claimed casualty loss deductions of

$50,729, $58,056, $4,704, and $13,899, respectively.     Petitioner

claimed that the casualty loss occurred in either 1974 or 1975.4


     3
       Some of the facts have been stipulated, and we incorporate
by this reference the parties’ stipulation of facts and the
attached exhibits.
     4
       The returns for 1992 and 1993 state the casualty occurred
in June 1974. The returns for 1994 and 1995 state the casualty
occurred in June 1975. At trial, petitioner testified that the
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                                 OPINION

1.   Casualty Loss Deductions

     Petitioner asserts that as a result of his then-wife’s

decision to terminate her pregnancy in 1974 or 1975, petitioner

suffered a “theft/casualty” loss of a “nonviable fetus”.    In

response to this loss, petitioner claims entitlement to casualty

loss deductions for each of the years 1992 through 1995 of

$50,729, $58,056, $4,704, and $13,899, respectively.    These

losses roughly correspond to the amount of gross income reported

for each year.

     Section 165(a) allows a deduction for losses sustained

during the taxable year which are not compensated for by

insurance or otherwise.   Under section 165(c), however, an

individual may deduct a loss not connected with a trade or

business or with a transaction entered into for profit if the

loss arose from “fire, storm, shipwreck, or other casualty, or

from theft.”   Sec. 165(c)(3).    Casualty losses under section 165

must be deducted for the taxable year in which the loss was

sustained.   See sec. 1.165-7(a)(1), Income Tax Regs.   Losses due

to theft may be deducted during the taxable year in which the

taxpayer discovered the loss.     See sec. 165(e).




casualty loss resulted when his then wife elected to terminate
her pregnancy in August 1974.
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      There is no authority for treating a nonviable fetus as

“property” for purposes of section 165(c)(3)--a proposition in

support of which petitioner has advanced no argument.

Petitioner’s claim is frivolous for two additional reasons.

First, a casualty loss deduction may be taken only for the

taxable year in which the loss was sustained, and a theft loss

deduction may be taken only for the taxable year in which the

taxpayer discovers the theft.   See sec. 1.165-7(a)(1), Income Tax

Regs.; sec. 165(e).    As petitioner’s former wife terminated her

pregnancy in the mid-1970's, and as petitioner has presented no

evidence suggesting that he did not discover his wife’s actions

until nearly 20 years later, petitioner’s deductions for the

years 1992 through 1995 are untimely.   Second, petitioner has not

sought to prove or otherwise justify the amounts deducted, which

roughly correspond with his gross income for each of the years in

issue.   As petitioner bears the burden of proof with respect to

these amounts, petitioner’s claim must fail.   See Rule 142(a).

Accordingly, we sustain respondent’s disallowance of the

casualty/theft losses claimed by petitioner.

2.   Liability for Additions to Tax Under Section 6651(a)(1)

      Additions to tax under section 6651(a)(1) apply in the case

of failure to file timely tax returns, unless the failure is due

to reasonable cause.   An addition equals 5 percent of the amount

required to be shown as tax on the return for each month or
                               - 6 -

fraction thereof during which the failure to file continues, up

to a maximum of 25 percent.   See sec. 6651(a)(1).

     The parties have stipulated that respondent received the

returns for each of the years in issue on December 16, 1996.

This was more than 5 months after the due dates, including any

extensions available to petitioner pursuant to section 6081(a),

for the returns for taxable years 1992, 1993, and 1994.   With

respect to the 1995 taxable year, respondent has no record

indicating that petitioner was granted an extension of time to

file for that year, and petitioner has offered no evidence with

respect to any extension.   Accordingly, we conclude that the 1995

return was filed more than 5 months after its due date.

Petitioner has offered no evidence of reasonable cause.

Therefore, petitioner is liable for section 6651(a)(1) additions

to tax equal to 25 percent of the amount of the tax required to

be shown on the return for each of the years in issue.

3.   Accuracy-Related Penalties Under Section 6662

     Petitioner bears the burden of proving that the

determinations pursuant to section 6662(a) are erroneous.    See

Rule 142(a).   Petitioner has introduced no evidence relating to

these determinations.   Therefore, he is liable for accuracy-

related penalties under section 6662(a).
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4.   Liability for Penalty Under Section 6673

     Section 6673 authorizes this Court to award a penalty to the

United States not in excess of $25,000 whenever it appears to the

Court that proceedings have been instituted or maintained by the

taxpayer primarily for delay, the taxpayer’s position in such

proceedings is frivolous or groundless, or the taxpayer

unreasonably failed to pursue available administrative remedies.

Previously, on its own motion, this Court has awarded damages to

the United States where the taxpayer advanced frivolous and

groundless contentions.   See Abrams v. Commissioner, 82 T.C. 403

(1984).   In the instant case, petitioner claimed utterly

groundless casualty losses, arising from his former wife’s

decision to terminate a pregnancy almost 20 years earlier, in

amounts obviously calculated to offset the taxable income he

reported.   Notwithstanding the Court’s warning that such claims

appeared frivolous, petitioner proceeded to trial.       Petitioner

has wasted the time and resources of this Court and respondent.

We will accordingly exercise our discretion under section 6673 to

require petitioner to pay a penalty to the United States of

$1,000.

     To reflect the foregoing,

                                         Decision will be entered

                                 under Rule 155.
