                         T.C. Memo. 2002-74



                       UNITED STATES TAX COURT



    RICHARDS ASSET MANAGEMENT TRUST, ET AL.,1 Petitioners v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket Nos. 10764-00, 10765-00,     Filed March 27, 2002.
                 10766-00, 10767-00.



     John M. Tkacik, Jr., for respondent.



                         MEMORANDUM OPINION


     CHIECHI, Judge:    These consolidated cases are before us on

respondent’s motion to hold petitioner in default in the case at

docket No. 10764-00 (respondent’s motion in the case at docket



     1
      Cases of the following petitioners are consolidated here-
with: Everett D. Richards, docket No. 10765-00; Everett D.
Richards, docket No. 10766-00; and Richards Charitable Trust,
docket No. 10767-00.
                              - 2 -

No. 10764-00), respondent’s motion to dismiss for lack of prose-

cution and to impose sanctions under section 66732 in the case at

docket No. 10765-00 (respondent’s motion in the case at docket

No. 10765-00), respondent’s motion to dismiss for lack of prose-

cution and to impose sanctions under section 6673 in the case at

docket No. 10766-00 (respondent’s motion in the case at docket

No. 10766-00), and respondent’s motion to hold petitioner in

default in the case at docket No. 10767-00 (respondent’s motion

in the case at docket No. 10767-00).   (We shall refer collec-

tively to those four motions as respondent’s motions.)   At the

request of respondent, on October 15, 2001, the Court held a

trial in order to enable respondent to present evidence to

satisfy the burden of production under section 7491(c) that

respondent maintains respondent has with respect to:   (1) The

accuracy-related penalty under section 6662(a) that respondent

determined for each of the taxable years 1996 and 1997 in the

notice of deficiency (notice) issued to Richards Asset Management

Trust (Richards Management Trust)3 in the case at docket No.

10764-00; (2) the accuracy-related penalty under section 6662(a)


     2
      All section references are to the Internal Revenue Code
(Code) in effect at all relevant times. All Rule references are
to the Tax Court Rules of Practice and Procedure.
     3
      When referring in this Opinion to Richards Asset Management
Trust and Richards Management Trust, our use of the word “Trust”
and any similar words is for convenience only and is not intended
to convey any meaning or have any significance for Federal tax
purposes.
                              - 3 -

that respondent determined for the taxable year 1996 in the

notice issued to Everett D. Richards (Mr. Richards)4 in the case

at docket No. 10765-00; (3) the accuracy-related penalty under

section 6662(a) for the taxable year 1997 that respondent deter-

mined in the notice issued to Mr. Richards in the case at docket

No. 10766-00; and (4) the addition to tax under section

6651(a)(1) for each of the taxable years 1996 and 1997 that

respondent determined in the notice issued to Richards Charitable

Trust5 in the case at docket No. 10767-00.

                           Background

     The record establishes and/or the parties do not dispute the

following:

     At the time the respective petitions in these cases were

filed, Richards Management Trust, Mr. Richards, and Richards

Charitable Trust listed in those petitions the same address in

Canton, Ohio.

     Richards Management Trust filed Form 1041, U.S. Income Tax


     4
      In the case at docket No. 10765-00, respondent issued the
notice to Mr. Richards and Joy A. Richards, deceased. Although
the petition in that case was filed in the name of Mr. Richards
and Joy A. Richards, deceased, on Oct. 12, 2001, the Court
dismissed the case for lack of jurisdiction as to Joy A. Rich-
ards, deceased. For convenience, we shall refer hereinafter to
the notice issued with respect to the case at docket No. 10765-00
as the notice issued to Mr. Richards.
     5
      When referring in this Opinion to Richards Charitable
Trust, our use of the word “Trust” and any similar words are for
convenience only and is not intended to convey any meaning or
have any significance for Federal tax purposes.
                               - 4 -

Return for Estates and Trusts (trust return), for each of the

taxable years 1996 and 1997.   In separate Schedules K-1, Benefi-

ciary’s Share of Income, Deductions, Credits, etc., that Richards

Management Trust included with each of its 1996 and 1997 trust

returns, Richards Management Trust showed Mr. Richards and

Richards Charitable Trust as beneficiaries and Mr. Richards as

the fiduciary of Richards Management Trust.

     In each of its 1996 and 1997 trust returns, Richards Manage-

ment Trust deducted depreciation with respect to certain personal

assets of Mr. Richards, including Mr. Richards’ personal resi-

dence that he had transferred to Richards Management Trust at a

time that is not disclosed by the record.    Richards Management

Trust also deducted other amounts in its 1996 and 1997 trust

returns with respect to personal expenses of Mr. Richards.

     During respondent’s examination of Richards Management

Trust’s 1996 and 1997 trust returns and thereafter, no books,

records, or other information was provided to respondent estab-

lishing (1) the jurisdiction under the laws of which Richards

Management Trust was purportedly organized, (2) the person who is

authorized to act on behalf of Richards Management Trust, and

(3) that Richards Management Trust was at all relevant times a

trust cognizable for Federal tax purposes.    Nor did Richards

Management Trust at any time provide any books, records, or other

information to respondent establishing the income reported and
                                - 5 -

the expense deductions claimed in Richards Management Trust’s

1996 and 1997 trust returns.

     In the notice issued to Richards Management Trust, respon-

dent determined, inter alia, that Richards Management Trust is

liable for each of the taxable years 1996 and 1997 for the

accuracy-related penalty under section 6662(a).

     Respondent has no record of Richards Charitable Trust’s

having filed with respondent Form 990-PF, Return of Private

Foundation (Form 990-PF), for either of the taxable years 1996

and 1997.    Nor does respondent have a record of any other Federal

tax returns having been filed by Richards Charitable Trust for

those years.

     In response to a request by respondent for information with

respect to Richards Charitable Trust, respondent was provided

with a copy of Form 990-PF for the taxable year 1997 that showed

Richards Charitable Trust as the organization to which such form

pertained.   However, as discussed above, respondent has no record

that Richards Charitable Trust filed with respondent Form 990-PF

for the taxable year 1997.

     During respondent’s examination of Richards Charitable

Trust’s taxable years 1996 and 1997 and thereafter, no books,

records, or other information was provided to respondent estab-

lishing (1) the jurisdiction under the laws of which Richards

Charitable Trust was purportedly organized, (2) the person who is
                              - 6 -

authorized to act on behalf of Richards Charitable Trust, and

(3) that Richards Charitable Trust was at all relevant times a

trust cognizable for Federal tax purposes.   Nor did Richards

Charitable Trust at any time provide any books, records, or other

information to respondent establishing the income shown and the

expense deductions claimed in the copy of Form 990-PF for the

taxable year 1997 that was provided to respondent during respon-

dent’s examination of Richards Charitable Trust in response to

respondent’s request for information with respect to Richards

Charitable Trust and that showed Richards Charitable Trust as the

organization to which such form pertained.

     In the notice issued to Richards Charitable Trust, respon-

dent determined, inter alia, that Richards Charitable Trust is

liable for each of the taxable years 1996 and 1997 for the

addition to tax under section 6651(a)(1).

     Joy A. Richards and Mr. Richards jointly filed Form 1040,

U.S. Individual Income Tax Return (return), for the taxable year

1996, and Mr. Richards filed a return for 1997.   During respon-

dent’s examination of those 1996 and 1997 returns and thereafter,

no books, records, or other information was provided to respon-

dent establishing the income reported and the expense deductions

claimed in those returns.

     In the notice issued to Mr. Richards with respect to the

taxable year 1996, respondent determined, inter alia, that he is
                                - 7 -

liable for that taxable year for the accuracy-related penalty

under section 6662(a).    In the notice issued to Mr. Richards with

respect to the taxable year 1997, respondent determined, inter

alia, that he is liable for that taxable year for the accuracy-

related penalty under section 6662(a).

      James Binge (Mr. Binge) was the return preparer for each of

Richards Management Trust’s 1996 and 1997 trust returns, Mr.

Richards and Joy A. Richards’ 1996 return, and Mr. Richards’ 1997

return.    Mr. Binge was also listed as the return preparer for

Richards Charitable Trust’s Form 990-PF for the taxable year 1997

that was provided to respondent during respondent’s examination

of Richards Charitable Trust but that respondent has no record of

having been filed with respondent.      Respondent has identified Mr.

Binge as an individual involved with purported trusts used for

tax avoidance purposes.

      On August 31, 2001, respondent filed separate motions to

compel answers to interrogatories and to compel production of

documents in each of the cases at docket Nos. 10765-00 and 10766-

00.   On September 19, 2001, the Court granted each of those

motions.    Mr. Richards did not answer respondent’s interrogato-

ries or produce the documents requested by respondent, as ordered

by the Court on September 19, 2001.

      On October 2, 2001, Richards Management Trust, Mr. Richards,

and Richards Charitable Trust filed a joint motion to continue
                               - 8 -

the trial in these cases, which the Court denied on October 2,

2001.

     On October 15, 2001, these cases were called from the

Court’s trial calendar at the Court’s trial session in Cleveland,

Ohio (Cleveland trial session).   At that calendar call, there was

no appearance by or on behalf of Richards Management Trust, Mr.

Richards, and Richards Charitable Trust.   At that time, respon-

dent orally moved to dismiss each of these cases for failure to

prosecute, and respondent requested, and the Court held, a trial

because, according to respondent, respondent has the burden of

production pursuant to section 7491(c) with respect to (1) the

accuracy-related penalties under section 6662(a) for 1996 and

1997 that respondent determined against Richards Management

Trust, (2) the respective accuracy-related penalties under

section 6662(a) for 1996 and 1997 that respondent determined

against Mr. Richards, and (3) the additions to tax under section

6651(a)(1) for 1996 and 1997 that respondent determined against

Richards Charitable Trust.   At the trial in these cases on

October 15, 2001, there was no appearance by or on behalf of

Richards Management Trust, Mr. Richards, and Richards Charitable

Trust.

     On November 13, 2001, respondent filed a written motion to

hold petitioner in default in each of the cases at docket Nos.

10764-00 and 10767-00 and a written motion to dismiss for lack of
                              - 9 -

prosecution and to impose sanctions under section 6673 in each of

the cases at docket Nos. 10765-00 and 10766-00.

     On December 3, 2001, the Court sua sponte issued separate

Orders (December 3, 2001 Show Cause Orders) directing each party

in the case at docket No. 10764-00 in which Richards Asset

Management Trust is named as petitioner and in the case at docket

No. 10767-00 in which Richards Charitable Trust is named as

petitioner to

     show cause in writing why the Court has jurisdiction
     over this case, including the identity of any purported
     fiduciary of petitioner and a detailed analysis of why
     such purported fiduciary has the capacity to litigate
     in the Court on behalf of petitioner.

     On December 19, 2001, respondent filed separate written

responses to the December 3, 2001 Show Cause Orders in the cases

at docket Nos. 10764-00 and 10767-00 in which respondent con-

tended, inter alia, that Richards Management Trust and Richards

Charitable Trust, respectively,

          11. * * * failed to establish that a trustee, if
     authorized, acted on its behalf when the purported
     petition was filed with the Court on October 16, 2000.

          12. * * * failed to file a proper petition with
     this Court in that the petition was not brought by and
     with the full descriptive name of the fiduciary enti-
     tled to institute a case on its behalf.

Respondent further argued in those separate responses to the

December 3, 2001 Show Cause Orders in the cases at docket Nos.

10764-00 and 10767-00 that

     Since the petition in this case was not brought by a
                              - 10 -

     party with proper capacity as required by the Tax Court
     Rules of Practice and Procedure, the Court lacks juris-
     diction * * *.

     On December 20, 2001, Richards Management Trust and Richards

Charitable Trust filed separate written responses to the December

3, 2001 Show Cause Orders in the cases at docket Nos. 10764-00

and 10767-00 (Richards Management Trust’s response to the Decem-

ber 3, 2001 Show Cause Order and Richards Charitable Trust’s

response to the December 3, 2001 Show Cause Order, respectively),

each of which was signed by Terrence A. Bentivegna (Mr.

Bentivegna) who identified himself in each such response as

“Trustee”.   Each such response asserted that “Petitioner does not

believe that this Court has jurisdiction.”   In support of that

position, Richards Management Trust’s response to the December 3,

2001 Show Cause Order and Richards Charitable Trust’s response to

the December 3, 2001 Show Cause Order set forth statements and

contentions that the Court finds to be frivolous and/or ground-

less.6


     6
      Each such response to the December 3, 2001 Show Cause Order
stated in pertinent part:

     1.   Petitioner petitioned this Court after having
          received false and misleading information from the
          respondent and attorneys David Wise and his asso-
          ciate Carol Jackson. The respondent has failed to
          properly assess any taxes in accordance with their
          required administrative procedures, and yet ad-
          vised the petitioner that the only method of dis-
          agreeing with the purported tax liability was to
          petition this Court.
                                                   (continued...)
                                 - 11 -

     On January 16, 2002, Richards Management Trust filed a

response to respondent’s motion to hold petitioner in default in

the case at docket No. 10764-00, and Mr. Richards filed a re-


     6
      (...continued)
     2.   This Courts’ [sic] order states “. . . petitioner
          purports to be a trust . . .” Petitioner is a
          trust, and the respondent has never been able to
          prove otherwise. Nor does the respondent have the
          right or ability to set aside a contract.

          *        *       *        *       *       *       *

     4.       Petitioner does not want this false tax claim to
              be litigated in court, and has petitioned this
              Court to have this case removed from the docket as
              having been petitioned in error due to the errone-
              ous instructions given by the respondent.

     WHEREFORE it is prayed that:

     1.       This Court dismiss this case at petitioner’s re-
              quest as the original petition was issued in error
              due to false directions given to petitioner by
              respondent. Petitioner believes that he has the
              right to correct his mistake and withdraw the
              original petition.

     2.       This Court and the respondent recognize the peti-
              tioner as a Trust and cease attempting to set
              aside a contract in direct opposition to the Con-
              stitution of the United States of America.

     3.       This court sanction the respondent for using this
              Court for illegal purposes. Respondent has no
              legal tax claim as petitioner has noted to respon-
              dent and this Court on numerous occasions. With-
              out a legal claim, respondent fraudulently in-
              structed petitioner to use this Court to legiti-
              mize his illegal attempt to deprive petitioner of
              his assets.

     4.       This Court instruct the respondent to cease, now
              and forever, harassment of petitioner.
                                - 12 -

sponse to respondent’s motion to dismiss for lack of prosecution

and to impose sanctions under section 6673 in the case at docket

No. 10766-00.7    Each of those respective responses contained

arguments and contentions that the Court found in an Order dated

January 18, 2002 (January 18, 2002 Order) in the cases at docket

Nos. 10764-00 and 10766-00 to be frivolous and/or groundless.    In

the January 18, 2002 Order, the Court reminded each petitioner

about section 6673(a)(1).8


     7
      On Feb. 19, 2002, Richards Charitable Trust filed a re-
sponse to respondent’s motion to hold petitioner in default in
the case at docket No. 10767-00. Although the Court did not
receive and have that response filed until Feb. 19, 2002, it
appears to have been mailed to the Court around Nov. 20, 2001.
Presumably because of the delays in mail delivery that the Court
has been experiencing since mid-October 2001, the Court’s receipt
of that response was delayed.
     8
      Sec. 6673(a)(1) states:

     SEC. 6673.    SANCTIONS AND COSTS AWARDED BY COURTS.

          (a) Tax Court Proceedings.--

               (1) Procedures instituted primarily for de-
          lay, etc.--Whenever it appears to the Tax Court
          that--

                       (A) proceedings before it have been
                  instituted or maintained by the taxpayer
                  primarily for delay,

                       (B) the taxpayer’s position in such
                  proceeding is frivolous or groundless, or

                       (C) the taxpayer unreasonably failed to
                  pursue available administrative remedies,

          the Tax Court, in its decision, may require the
                                                   (continued...)
                               - 13 -

     On February 15, 2002, Richards Management Trust, Mr. Rich-

ards, and Richards Charitable Trust filed a joint brief in these

cases.    That brief sets forth statements, contentions, and

arguments that the Court finds to be frivolous and/or ground-

less.9


     8
        (...continued)
            taxpayer to pay to the United States a penalty not
            in excess of $25,000.
     9
        Petitioners’ joint brief in these cases states in pertinent
part:

     This is a proceeding to determine if the Internal
     Revenue Service can ignore the strict limitations
     imposed on it by Congress, via the Code of Federal
     Regulations, and its’ [sic] own required administrative
     procedures to extort assets from unsuspecting inhabit-
     ants of one of the fifty (50) states of the United
     States of America, to wit: Everett D. Richards, et al.

         *       *       *       *       *       *       *

     U.S.C. Title 26 Section 7602 is the I.R.S.’s authority
     to examine books and records regarding “internal reve-
     nue tax”--not income tax. This is corroborated by the
     fact that the implementing regulation for Section 7602
     is located in C.F.R. Title 27, parts 70, 170 and 296.

          *       *       *       *       *       *       *

     In accordance with C.F.R. 1.861-8(f) petitioners, et
     al, do not receive any “income” or receipts from a
     “taxable source”.

          *       *       *       *       *       *       *

     Petitioners, et al, have never been legally assessed
     any tax as required by U.S.C. Title 26 Section 6203 and
     C.F.R. regulation 301.6203-1 and corroborated in Bull
     v. U.S., 295 US 247 * * *.

     Petitioners, et al, determinations are based on Supreme
     Court decisions, Treasury Orders, U.S.C. Title 26
                                                   (continued...)
                              - 14 -

                            Discussion

Richards Management Trust and Richards Charitable Trust

     On December 3, 2001, the Court sua sponte issued the respec-

tive December 3, 2001 Show Cause Orders regarding the Court’s



     9
      (...continued)
     codes, and implementing (or lack of implementing)
     C.F.R. Title 26 regulations and various other refer-
     ences, and as such cannot be considered frivolous or
     “. . . a hodgepodge of unsupported assertions, irrele-
     vant platitudes and legalistic gibberish.”

         *      *       *       *        *      *         *

     Everett D. Richards, et al, petitioners in the cases at
     Docket Nos. 10764-00, 10765-00, 10766-00 and 10767-00
     are not liable for any income tax, penalties and/or
     interest pursuant to any U.S.C. Title 26 code sections.

     Petitioners, et al, have at all times rebutted and
     refuted respondents prima facie allegations; thus, the
     burden of proof is on the respondent.

     Treasury Order 120-01 dated June 6, 1972 establishes
     the Bureau of Alcohol, Tobacco and Firearms and trans-
     fers U.S.C. Title 26 Section 61 through 80, inclusive,
     to U.S.C. Title 27 and the Bureau of Alcohol, Tobacco
     and Firearms. Petitioners, et al, are not now and
     never have been involved in the manufacture, distribu-
     tion or sale of alcohol, tobacco or firearms, or been
     involved in any other excise taxable activity. This is
     corroborated by the Code of Federal Regulations Table
     of Authority and Rules.

     A review of the Department of the Treasury organization
     chart reveals that the Internal Revenue Service is not
     administered by any of the organizations with enforce-
     ment authority. This is corroborated by the fact that
     there are no Title 26 implementing regulation under
     Title 26 C.F.R.

     The established trusts bear no burden of proof as their
     records are not subject to review. Boyd vs. U.S. 116
     U.S. 618; Silver Thorne Lumber Co. vs U.S. 1251 US.
     385.
                             - 15 -

jurisdiction over the cases at docket Nos. 10764-00 and 10767-00.

     Rule 60 provides in pertinent part:

          (a) Petitioner: (1) Deficiency or Liability
     Actions: A case shall be brought by and in the name of
     the person against whom the Commissioner determined the
     deficiency (in the case of a notice of deficiency)
     * * * or by and with the full descriptive name of the
     fiduciary entitled to institute a case on behalf of
     such person. See Rule 23(a)(1). A case timely brought
     shall not be dismissed on the ground that it is not
     properly brought on behalf of a party until a reason-
     able time has been allowed after objection for ratifi-
     cation by such party of the bringing of the case; and
     such ratification shall have the same effect as if the
     case had been properly brought by such party. * * *

          *     *       *       *       *       *       *

          (c) Capacity: * * * The capacity of a fiduciary
     or other representative to litigate in the Court shall
     be determined in accordance with the law of the juris-
     diction from which such person’s authority is derived.

     The record does not establish where Richards Management

Trust and Richards Charitable Trust were organized.   The respec-

tive petitions in the cases at docket Nos. 10764-00 and 10767-00

listed an address for Richards Management Trust and Richards

Charitable Trust in Canton, Ohio,10 which is also the service

address used by the Court in those cases.   Assuming arguendo that

Richards Management Trust and Richards Charitable Trust were

trusts organized under the laws of the State of Ohio, the admin-

istration of each of which is subject to the laws of that State,


     10
      The Ohio address listed in the respective petitions in the
cases at docket Nos. 10764-00 and 10767-00 is the same address
listed by Mr. Richards in the respective cases at docket Nos.
10765-00 and 10766-00.
                                 - 16 -

under Ohio law, see Rule 60(c), a trustee generally is the proper

party authorized to act on behalf of a trust.        Firestone v.

Galbreath, 976 F.2d 279, 284 (6th Cir. 1992); Saxton v.

Seiberling, 48 Ohio St. 554, 29 N.E. 179 (1891); see Ohio R. Civ.

P. 17(A).11

     In the cases at docket Nos. 10764-00 and 10767-00, Richards

Management Trust and Richards Charitable Trust, respectively,

have the burden of proving that this Court has jurisdiction, see

Fehrs v. Commissioner, 65 T.C. 346, 348 (1975); Natl. Comm. to

Secure Justice in the Rosenberg Case v. Commissioner, 27 T.C.

837, 839 (1957), by establishing affirmatively all facts giving

rise to our jurisdiction, see Wheeler’s Peachtree Pharmacy, Inc.

v. Commissioner, 35 T.C. 177, 180 (1960); Consol. Cos. v. Commis-

sioner, 15 B.T.A. 645, 651 (1929).        In order to meet that burden,

Richards Management Trust in the case at docket No. 10764-00 and

Richards Charitable Trust in the case at docket No. 10767-00 must



     11
          Ohio R. Civ. P. 17(A) provides in pertinent part:

     RULE 17.     Parties plaintiff and defendant; capacity

          (A) Real party in interest. Every action shall be
     prosecuted in the name of the real party in interest.
     An executor, administrator, guardian, bailee, trustee
     of an express trust, a party with whom or in whose name
     a contract has been made for the benefit of another, or
     a party authorized by statute may sue in his name as
     such representative without joining with him the party
     for whose benefit the action is brought. * * * [Empha-
     sis added.]
                               - 17 -

provide evidence establishing who has the authority to act on its

behalf in each such proceeding.    See Natl. Comm. to Secure

Justice in the Rosenberg Case v. Commissioner, supra at 839-840;

Coca-Cola Bottling Co. v. Commissioner, 22 B.T.A. 686, 700

(1931).

     On the instant record, we find that Richards Management

Trust in the case at docket No. 10764-00 and Richards Charitable

Trust in the case at docket No. 10767-00 have failed to establish

who has the authority to act on their behalf in those respective

proceedings.   We further find on that record that neither of the

cases at docket Nos. 10764-00 and 10767-00 was brought by and

with the full descriptive name of the fiduciary entitled to

institute each such case on behalf of Richards Management Trust

or Richards Charitable Trust, as the case may be, as required by

Rule 60(a)(1).    On the record before us, we conclude that we do

not have jurisdiction over the cases at docket Nos. 10764-00 and

10767-00.   Accordingly, we shall dismiss those cases for lack of

jurisdiction.12

Mr. Richards

     Neither Mr. Richards nor any authorized representative of

Mr. Richards appeared at the Court’s Cleveland trial session on



     12
      Because we shall dismiss the cases at docket Nos. 10764-00
and 10767-00 for lack of jurisdiction, we shall deny respondent’s
motion in the case at docket No. 10764-00 and respondent’s motion
in the case at docket No. 10767-00.
                                - 18 -

October 15, 2001, at the call of these consolidated cases from

the Court’s trial calendar.

     At the trial held by the Court in the cases at docket Nos.

10765-00 and 10766-00, neither Mr. Richards nor any authorized

representative of Mr. Richards appeared.

     The written response by Mr. Richards to respondent’s motion

to dismiss for lack of prosecution and to impose sanctions under

section 6673 in the case at docket No. 10766-00 does not contain

any valid reason why that case should not be dismissed for lack

of prosecution.13    That response contained contentions and argu-

ments that the Court found in the Court’s January 18, 2002 Order

to be frivolous and/or groundless.       The joint brief filed by Mr.

Richards (and Richards Management Trust and Richards Charitable

Trust) also contains statements, contentions, and arguments that

the Court finds to be frivolous and/or groundless and do not set

forth any valid reason why the cases at docket Nos. 10765-00 and

10766-00 should not be dismissed for lack of prosecution.

     Section 7491(c) provides in pertinent part:

     SEC. 7491.     BURDEN OF PROOF.

          (c) Penalties.–-Notwithstanding any other provi-
     sion of this title, the Secretary shall have the burden
     of production in any court proceeding with respect to
     the liability of any individual for any penalty * * *.



     13
      Mr. Richards did not file a response to respondent’s
motion to dismiss for lack of prosecution and to impose sanctions
under sec. 6673 in the case at docket No. 10765-00.
                                - 19 -

     Section 6662(a) imposes an accuracy-related penalty equal to

20 percent of the underpayment of tax resulting from, inter alia,

negligence or disregard of rules or regulations, sec. 6662(b)(1),

or a substantial understatement of income tax, sec. 6662(b)(2).

For purposes of section 6662(a), an understatement is equal to

the excess of the amount of tax required to be shown in the tax

return over the amount of tax shown in the tax return, sec.

6662(d)(2)(A), and is substantial in the case of an individual if

it exceeds the greater of 10 percent of the tax required to be

shown in the return or $5,000, sec. 6662(d)(1)(A).     For purposes

of section 6662(a), the term “negligence” includes any failure to

make a reasonable attempt to comply with the Code, and the term

“disregard” includes any careless, reckless, or intentional

disregard.    Sec. 6662(c).   Negligence has also been defined as a

lack of due care or failure to do what a reasonable person would

do under the circumstances.     Leuhsler v. Commissioner, 963 F.2d

907, 910 (6th Cir. 1992), affg. T.C. Memo. 1991-179; Antonides v.

Commissioner, 91 T.C. 686, 699 (1988), affd. 893 F.2d 656 (4th

Cir. 1990).

     The accuracy-related penalty under section 6662(a) does not

apply to any portion of an underpayment if it is shown that there

was reasonable cause for, and that the taxpayer acted in good

faith with respect to, such portion.     Sec. 6664(c)(1).   The

determination of whether the taxpayer acted with reasonable cause
                                - 20 -

and in good faith depends on the pertinent facts and circum-

stances, including the taxpayer’s efforts to assess his or her

proper tax liability, the knowledge and experience of the tax-

payer, and the reliance on the advice of a professional, such as

an accountant.   Sec. 1.6664-4(b)(1), Income Tax Regs.     Reliance

on the advice of a professional, such as an accountant, does not

necessarily demonstrate reasonable cause and good faith      unless,

under all the circumstances, such reliance was reasonable and the

taxpayer acted in good faith.    Id.     In the case of claimed

reliance on the accountant who prepared the taxpayer’s tax

return, the taxpayer must establish that correct information was

provided to the accountant and that the item incorrectly omitted,

claimed, or reported in the return was the result of the accoun-

tant’s error.    Ma-Tran Corp. v. Commissioner, 70 T.C. 158, 173

(1978).

     On the record before us, we find that respondent has satis-

fied the burden of production that respondent maintains respon-

dent has with respect to the respective accuracy-related penal-

ties under section 6662(a) that respondent determined to impose

on Mr. Richards for the taxable years 1996 and 1997.14

     Based on our examination of the entire record before us, we



     14
      We are not deciding in the cases at docket Nos. 10765-00
and 10766-00 whether the Commissioner of Internal Revenue has the
burden of production in cases subject to sec. 7491(c) when a
taxpayer fails to appear for trial.
                             - 21 -

shall grant respondent’s motion in the case at docket No. 10765-

00 and respondent’s motion in the case at docket No. 10766-00 in

that we shall dismiss each of those cases for failure by peti-

tioner in each such case to prosecute such case, and we shall

enter a decision in each of those cases sustaining the determina-

tions that respondent made in the notice to which each such case

pertains but in the reduced amounts which respondent concedes are

appropriate in order to reflect the duplication of certain income

determinations in the respective notices issued to Mr. Rich-

ards.15

     In respondent’s motions in the cases at docket Nos. 10765-00

and 10766-00, respondent also asks the Court to impose a penalty



     15
      As explained in respondent’s respective motions in the
cases at docket Nos. 10765-00 and 10766-00, respondent attributed
the income reported for the taxable year 1996 by Richards Manage-
ment Trust 100 percent to Joy A. Richards, deceased, Mr. Rich-
ards, and Richards Charitable Trust, and respondent attributed
the income reported for the taxable year 1997 by Richards Manage-
ment Trust 100 percent to Mr. Richards and Richards Charitable
Trust. The amounts of such income attributed to Richards Chari-
table Trust for 1996 were reattributed for that year to Mr.
Richards, and the amounts of such income attributed to Richards
Charitable Trust for 1997 were reattributed to Mr. Richards,
which resulted in a duplication of said amounts of income in the
respective notices issued to Mr. Richards with respect to the
taxable year 1996 and to Mr. Richards with respect to the taxable
year 1997. As set forth in respondent’s respective motions in
the cases at docket Nos. 10765-00 and 10766-00 and in the respec-
tive exhibits attached to those motions, the revised deficiencies
for Mr. Richards for the taxable years 1996 and 1997 are $33,451
and $75,934, respectively. Consistently, the revised accuracy-
related penalties under sec. 6662(a) imposed on Mr. Richards for
the taxable years 1996 and 1997 are $6,690.20 and $15,186.80,
respectively.
                                - 22 -

under section 6673(a)(1) on Mr. Richards in each of those cases.

As grounds therefor, respondent contends that Mr. Richards

(1) instituted proceedings in the Court primarily for delay,

(2) advanced frivolous and groundless positions in such proceed-

ings, and (3) unreasonably failed to pursue administrative

remedies.

     On the record before us, we find that Mr. Richards insti-

tuted the proceedings in the cases at docket Nos. 10765-00 and

10766-00 primarily for delay.    We also find on that record that

Mr. Richards’ position in the cases at docket Nos. 10765-00 and

10766-00 is frivolous and/or groundless.    On the record before

us, we shall impose a penalty in those cases on Mr. Richards

pursuant to section 6673(a)(1) in the amounts of $8,000 and

$18,000, respectively.

     To reflect the foregoing,


                                      An appropriate order of dis-

                                 missal for lack of jurisdiction and

                                 denying respondent’s motion will be

                                 entered in each of the cases at

                                 docket Nos. 10764-00 and 10767-00,

                                 and an appropriate order granting

                                 respondent’s motion and decision

                                 will be entered in each of the

                                 cases at docket Nos. 10765-00 and
- 23 -

10766-00 sustaining respondent’s

determinations in reduced amounts

and imposing a penalty under sec-

tion 6673(a)(1) in each of those

two cases.
