                         T.C. Memo. 2002-146



                       UNITED STATES TAX COURT



         LEIGH GILL, f.k.a. TAMORY L. GILL, Petitioner v.
           COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 8401-00.             Filed June 11, 2002.


     Leigh Gill, pro se.

     Stephen P. Baker, for respondent.



                         MEMORANDUM OPINION


     VASQUEZ, Judge:    This case is before the Court on

respondent’s motion to dismiss for lack of prosecution pursuant

to Rule 123(b)1 and motion for sanctions under section


     1
        Unless otherwise indicated, 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.
                               - 2 -

6673(a)(1).   By notice of deficiency, respondent determined a

deficiency of $7,149 and an accuracy-related penalty of $813 with

respect to petitioner’s 1997 Federal income tax.

Background

     In the notice of deficiency, respondent determined, on the

basis of income reported by third-party payers, that petitioner

failed to report wage income of $32,939 from Empire Hospital,

nonemployee compensation of $7,532 from Douglas GR, and interest

income of $29 from United Health for 1997.   Respondent also

determined self-employment tax adjustments and an accuracy-

related penalty.

     On August 21, 2000, petitioner invoked the jurisdiction of

this Court by timely filing an imperfect petition.

     On September 1, 2000, respondent filed a motion to dismiss

for failure to state a claim and to impose sanctions pursuant to

section 6673 (respondent’s first motion).

     On September 5, 2000, the Court ordered petitioner to file

an amended petition in order to comply with the Rules of the

Court as to the form and content of a proper petition and

calendared respondent’s first motion for a hearing on October 4,

2000, in Washington, D.C.

     On October 2, 2000, petitioner filed an amended petition

virtually identical to the original petition.   At the time she
                               - 3 -

filed the amended petition, petitioner resided in Vancouver,

British Columbia, Canada.

     In the petitions, petitioner averred, among other things,

that “The Self-assessment form (1040) on file for the year 1997

for Account #XXX-XX-XXXX was submitted in error by Petitioner,”

“The amount of compensation received by this Petitioner was not

‘gross income’ within the meaning of the Internal Revenue Code,”

“this Petitioner received compensation for her labors errantly

listed on her employer’s 1099, which has never been defined as

income in the IRC,” “The lawful-authority of assessing an

ACCURACY RELATED PENALTY is in question,” “Petitioner’s amount of

self-assessed taxes were not from gross income as defined within

the meaning of the IRC,” and “Petitioner disagrees with the

Authority of the IRS and the lawfulness of filing requirements.”

     On October 4, 2000, this case was called from the calendar

for the motions session of the Court at Washington, D.C.

Petitioner failed to appear at the hearing.   The Court noted that

we had received “a slew” of documents from petitioner.   These

documents, however, contained various defects and were returned

to petitioner unfiled.   The Court received into the record a Form

1040, U.S. Individual Income Tax Return, that respondent had

accepted as petitioner’s Federal income tax return for 1997.     At
                                - 4 -

this time, via a written order, the Court denied respondent’s

first motion and advised petitioner of the provisions of section

6673.

     On her 1997 tax return, petitioner reported zero wages, zero

interest, zero total income, zero adjusted gross income, zero

total tax, and claimed a $4,2902 refund based on Federal income

tax withholdings.    Petitioner attached to her Form 1040 a three-

page letter reciting tax protester type arguments, a Form W-2,

Wage and Tax Statement, from Empire Hospital Service listing

$33,540 in wages, and a Form W-2 from Group Health Northwest

listing $4,312 in wages.3

     In the answer, respondent denied the assignments of error

alleged by petitioner.    Additionally, respondent affirmatively

alleged:    (1) Petitioner disclosed on an attachment to her 1997

return, but did not report as income, wages of $33,540 from

Empire Hospital Service and $4,312 from Group Health Northwest;

(2) during 1997 petitioner received taxable income of $844 from

TIAA, $2,910 from CREF, $29 from United Health, and $7,532 from

Douglas GR; (3) petitioner’s correct taxable income for 1997 was

$41,234; and (4) the correct amount of the deficiency for 1997

was $8,339 instead of $7,149 (i.e., respondent increased the


     2
          For convenience, figures are rounded to the nearest
dollar.
     3
        The Form 1040 and Forms W-2 listed petitioner’s address
as 10801 E. Boone Ave., Spokane, WA 99206.
                                - 5 -

deficiency by $1,190).4   Respondent attached the notice of

deficiency and petitioner’s 1997 return, which included the

three-page letter from petitioner and the two Forms W-2, to the

answer.

     By notice dated January 18, 2001, the Court set this case

for trial at the Court’s Anchorage, Alaska, session beginning

June 18, 2001.   This notice specifically stated:   “YOUR FAILURE

TO APPEAR MAY RESULT IN DISMISSAL OF THE CASE AND ENTRY OF

DECISION AGAINST YOU.”

     On February 12, 2001, respondent filed a motion for entry of

order that undenied allegations in answer be deemed admitted

(respondent’s second motion).   That same day, the Court ordered

petitioner to file a reply, as required by Rule 37(a) and (b), on

or before February 26, 2001.    The Court advised petitioner that

if she did not file a reply, as directed, the Court would grant

respondent’s second motion and would deem admitted the

affirmative allegations in the answer.

     On March 13, 2001, after having received no response from

petitioner, the Court granted respondent’s second motion and

ordered that the undenied allegations set forth in the answer be

deemed admitted.

     By notice dated June 7, 2001, the Court notified the parties



     4
        Respondent did not allege an increase in the accuracy-
related penalty.
                               - 6 -

of a change of courtroom and address for trial at the Court’s

Anchorage, Alaska, session beginning June 18, 2001.

     On June 18, 2001, this case was called from the calendar for

the trial session of the Court at Anchorage, Alaska.     Petitioner

failed to appear at the calendar call.     At that time, respondent

orally moved to dismiss for lack of prosecution.     The Court set

this case for recall on June 25, 2001.

     On June 20, 2001, the Court received and filed a motion to

continue from petitioner.5

     On June 25, 2001, this case was recalled from the calendar

for the trial session of the Court at Anchorage, Alaska.

Petitioner again failed to appear.     At this time, respondent

filed a written motion to dismiss for lack of prosecution (motion

to dismiss) and a motion for sanctions under section 6673(a)(1)

(motion for sanctions).   Attached to the motion to dismiss is a

Form 1099 for 1997 reporting $7,532 in nonemployee compensation

to petitioner.   Attached to the motion for sanctions are:    (1)

Several documents reciting tax protester type arguments submitted

by petitioner to the Internal Revenue Service (IRS), (2) a March

26, 2001, letter from respondent inviting petitioner to a meeting

to discuss the case pursuant to Branerton Corp. v. Commissioner,

61 T.C. 691 (1974), and (3) a June 8, 2001, letter from

respondent reminding petitioner of the date and time of the


     5
         The motion to continue was dated June 13, 2001.
                                 - 7 -

calendar call for the Alaska trial session and enclosing a

proposed stipulation of facts.

     On this same date, via a written order, the Court denied

petitioner’s motion to continue, took respondent’s motion to

dismiss and motion for sanctions under advisement, and ordered

petitioner to reply to respondent’s aforementioned motions on or

before July 25, 2001.   The Court has not received any reply from

petitioner.

Discussion

I.   Rule 123(b).   Dismissal

     The Court may dismiss a case and enter a decision against a

taxpayer for his failure properly to prosecute or to comply with

the Rules of this Court.   Rule 123(b).   Rule 123(b) generally

applies in situations where the taxpayer bears the burden of

proof.    Respondent, in the motion to dismiss, represented that he

has the burden of production regarding the penalty and the burden

of proof only with respect to the request for an increased

deficiency.   Sec. 7491(a), (c); rule 142(a).

     A.    The Deficiencies

     As a general rule, the taxpayer bears the burden of proving

the Commissioner's deficiency determinations incorrect.    Rule

142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933).     Section

7491(a), however, provides that if a taxpayer introduces credible

evidence and meets certain other prerequisites, the Commissioner
                                 - 8 -

shall bear the burden of proof with respect to factual issues

relating to the liability of the taxpayer for a tax imposed under

subtitle A or B of the Code.

     Petitioner failed to appear and did not introduce any

evidence.     Therefore, we conclude that the burden of proof

regarding the deficiency determined in the statutory notice of

deficiency is not placed on respondent pursuant to section

7491(a).    Accordingly, we sustain respondent’s deficiency

determination contained in the statutory notice of deficiency.

     Pursuant to Rule 142(a), respondent bears the burden of

proof with respect to the request for an increased deficiency.

Respondent submitted, and the Court received as evidence, Forms

W-2 and 1099 issued to petitioner.       Additionally, as noted supra,

petitioner is deemed to have admitted certain facts supporting an

increased deficiency affirmatively alleged by respondent in the

answer.    On the basis of the evidence, we sustain the increased

deficiency.

     B.     Section 6662(a)

     Pursuant to section 6662(a), a taxpayer may be liable for a

penalty of 20 percent on the portion of an underpayment of tax

due to a substantial understatement of income tax.      Sec. 6662(b).

An “understatement” is the difference between the amount of tax

required to be shown on the return and the amount of tax actually

shown on the return.     Sec. 6662(d)(2)(A).   A “substantial
                                - 9 -

understatement” exists if the understatement exceeds the greater

of (1) 10 percent of the tax required to be shown on the return

for a taxable year, or (2) $5,000.      Sec. 6662(d)(1).   The

understatement is reduced to the extent that the taxpayer (1) has

adequately disclosed facts affecting the tax treatment of an item

and there is a reasonable basis for such treatment, or (2) has

substantial authority for the tax treatment of an item.       Sec.

6662(d)(2)(B).

     Section 6664(c)(1) provides that no accuracy-related penalty

shall be imposed with respect to any portion of an underpayment

if it is shown that there was reasonable cause for such portion

and that the taxpayer acted in good faith with respect to such

portion.   The decision as to whether the taxpayer acted with

reasonable cause and in good faith depends upon all the pertinent

facts and circumstances.    Sec. 1.6664-4(b)(1), Income Tax Regs.

     Section 7491(c) provides that the Commissioner shall bear

the burden of production with respect to the liability of any

individual for penalties.   “The Commissioner’s burden of

production under section 7491(c) is to produce evidence that it

is appropriate to impose the relevant penalty”.6     Swain v.

Commissioner, 118 T.C. ___, ___ (2002) (slip op. at 9); see also

Higbee v. Commissioner, 116 T.C. 438, 446 (2001).      If a taxpayer


     6
        We do not decide herein whether respondent would have met
his burden of production if he had not produced any evidence when
the taxpayer failed to appear for trial.
                                  - 10 -

files a petition alleging some error in the determination of the

penalty, the taxpayer’s challenge generally will succeed unless

the Commissioner produces evidence that the penalty is

appropriate.       Swain v. Commissioner, supra at ___ (slip op. at

12).       The Commissioner, however, does not have the obligation to

introduce evidence regarding reasonable cause or substantial

authority.       Higbee v. Commissioner, supra at 446-447.

       Respondent submitted, and the Court received as evidence,

petitioner’s 1997 tax return, Forms W-2 and 1099 issued to

petitioner, and several documents petitioner submitted to the

IRS.       Furthermore, as noted supra, petitioner is deemed to have

admitted certain facts.       On the basis of the evidence, we find

that petitioner had a substantial understatement of income tax.7

Petitioner did not present any evidence indicating reasonable

cause or substantial authority.       Id.   Accordingly, on this issue,

we sustain respondent’s determination.

       C.      Conclusion

       We have sustained all of respondent's determinations.

Therefore, we shall enter a decision for respondent.

III. Section 6673(a)(1)

       Section 6673(a) authorizes this Court to penalize up to



       7
        Petitioner was required to show $8,339 of tax on her 1997
return; however, she reported zero. Petitioner’s understatement
exceeds both 10 percent of the tax required to be shown on her
return ($834) and $5,000.
                              - 11 -

$25,000 a taxpayer who institutes or maintains a proceeding

primarily for delay or pursues a position in this Court which is

frivolous or groundless.   Petitioner’s conduct in this case has

convinced us that she maintained this proceeding primarily for

delay.   Petitioner’s actions have resulted in a waste of limited

judicial and administrative resources that could have been

devoted to resolving bona fide claims of other taxpayers.     Cook

v. Spillman, 806 F.2d 948 (9th Cir. 1986).    Petitioner’s

insistence on making frivolous protester type arguments indicates

an unwillingness to respect the tax laws of the United States.

Accordingly, we shall grant respondent’s motion for sanctions and

require petitioner to pay a penalty to the United States pursuant

to section 6673 in the amount of $7,500.

     To reflect the foregoing,

                                           An appropriate order and

                                    order of dismissal and

                                    decision will be entered.
