                         T.C. Memo. 1998-410



                       UNITED STATES TAX COURT



                   DAVID WHITE, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 19412-97.                Filed November 13, 1998.



     David White, pro se.

     Melanie R. Urban, for respondent.



                         MEMORANDUM OPINION

     VASQUEZ, Judge:    This case is before the Court on

respondent's motion for summary judgment under Rule 1211 and to

impose a penalty under section 6673.   Respondent determined a

deficiency of $26,806, an addition to tax of $6,702 under section

     1
       All Rule references are to the Tax Court Rules of Practice
and Procedure, and all section references are to the Internal
Revenue Code in effect for the year in issue.
                                - 2 -


6651(a) for late filing, and an addition to tax of $1,462 under

section 6654(a) for failure to pay estimated taxes with respect

to petitioner's 1995 Federal income tax.

Background

     Petitioner resided in Houston, Texas, when he filed his

petition.

     The notice of deficiency includes an explanation that the

adjustments made to petitioner's taxable income are attributable

to petitioner's failure to file a 1995 tax return and to report

various items of income including:      (1) Nonemployee compensation

paid by Lincoln Investment Planning, Inc., General American Life

Insurance Co., and Willow Fork Drainage District; (2) interest

paid by Charles Schwab & Co. and Texas Commerce Bank; (3)

dividends paid by Pioneer U.S. Government Money Fund and All

Saints Credit Union; and (4) gains derived from stock sales in

1995.   These items of income were reported to respondent on Forms

1099 and other information returns submitted by the payors.

     Petitioner invoked this Court's jurisdiction by filing an

imperfect petition for redetermination, followed by an amended

petition.    Respondent filed a timely answer to the amended

petition.

     Respondent subsequently served petitioner with a request for

admissions (with attached exhibits) pursuant to Rule 90(a) and

filed the same with the Court pursuant to Rule 90(b).     Petitioner
                                  - 3 -


failed to respond to respondent's request for admissions.     As a

consequence, each matter set forth therein is deemed admitted

pursuant to Rule 90(c).      Alexander v. Commissioner, 926 F.2d 197,

198-199 (2d Cir. 1991), affg. per curiam T.C. Memo. 1990-315;

Marshall v. Commissioner, 85 T.C. 267, 272 (1985).

     Petitioner is deemed to have admitted the following facts

pursuant to Rule 90(c).   Petitioner did not file an income tax

return for 1995.   During 1995, petitioner received self-

employment income in the following amounts:

                     Payor                      Amount Received

          Lincoln Investment Planning, Inc.         $78,320
          General American Life Insurance Co.         1,187
          Willow Fork Drainage District                 700

     During 1995, petitioner received interest income from

Charles Schwab and Co. and Texas Commerce Bank, N.A., in the

amounts of $401.38 and $18.48, respectively.     During that year,

petitioner received dividend income from Pioneer U.S. Government

Money Fund and All Saints Credit Union in the amounts of $27.36

and $154.79, respectively.

     During 1995, petitioner sold shares of Pioneer Gold Shares-

Class A at a net gain of $549.19.     During that year, petitioner

sold shares of Wainoco Oil at a net gain of $248.79.

     Petitioner did not have reasonable cause for not filing his

1995 return.   Petitioner is liable for the addition to tax

pursuant to section 6651(a)(1) for the taxable year 1995.
                                     - 4 -


Petitioner did not pay any estimated tax for the taxable year

1995 and is liable for the addition to tax pursuant to section

6654(a) for that year.    Petitioner is liable for self-employment

tax in the amount of $9,737 for the taxable year.

     After respondent filed a motion for summary judgment,

petitioner filed a response to respondent's motion that was

nothing more than tax protester rhetoric and legalistic gibberish

like:

          1. Petitioner is not a taxpayer.            * * *

                         *   *   *    *   *   *   *

           5. "Income" as defined by law is limited to foreign
     earned income and/or war profits and/or windfall profits.
     * * *

                         *   *   *    *   *   *   *

          7. The determination of gross income and adjusted gross
     income is income applicable in Guam by the Guam Territorial
     income tax. * * *

                         *   *   *    *   *   *   *

           12. That all property including money accepted with
     federal income tax returns, such as Form 1040, are accepted
     as gifts to the United States and not accepted as taxes.
     * * *

          13. Tax Court has no jurisdiction regarding a
     deficiency of gifts to the United States and the instant
     deficiency notice is bogus and fraudulent.

Discussion

     Summary judgment is intended to expedite litigation and

avoid unnecessary and expensive trials.            Florida Peach Corp. v.

Commissioner, 90 T.C. 678, 681 (1988).            Summary judgment is
                                - 5 -


appropriate "if the pleadings, answers to interrogatories,

depositions, admissions, and any other acceptable materials,

together with the affidavits, if any, show that there is no

genuine issue as to any material fact and that a decision may be

rendered as a matter of law."   Rule 121(b); see Sundstrand Corp.

v. Commissioner, 98 T.C. 518, 520 (1992), affd. 17 F.3d 965 (7th

Cir. 1994); Zaentz v. Commissioner, 90 T.C. 753, 754 (1988);

Naftel v. Commissioner, 85 T.C. 527, 529 (1985).

     The moving party bears the burden of proving that there is

no genuine issue of material fact, and factual inferences will be

read in a manner most favorable to the party opposing summary

judgment.   Dahlstrom v. Commissioner, 85 T.C. 812, 821 (1985);

Jacklin v. Commissioner, 79 T.C. 340, 344 (1982).   Summary

judgment is appropriate where the facts deemed admitted pursuant

to Rule 90(c) support a finding that there is no genuine issue as

to any material fact.   Morrison v. Commissioner, 81 T.C. 644,

651-652 (1983).

     Based upon our review of the record, we are satisfied that

there is no genuine issue of material fact and that respondent is

entitled to judgment as a matter of law.

     The deficiency determined by respondent in this case arises

from a reconstruction of petitioner's taxable income because

petitioner failed to provide respondent with adequate records or

to file a Federal income tax return for 1995.   The factual
                               - 6 -


allegations deemed admitted by petitioner under Rule 90(c)

establish:   (1) Petitioner received taxable income during 1995 in

the amounts determined in the notice of deficiency; (2)

petitioner failed to establish reasonable cause for his failure

to file his income tax return and has provided no basis for his

failure to pay estimated taxes during 1995; and (3) petitioner is

liable for the deficiency and additions to tax for 1995 as

determined by respondent in the notice of deficiency.

     In sum, the factual allegations deemed admitted by

petitioner under Rule 90(c) establish that respondent's

determinations with respect to petitioner's liabilities for the

deficiency and additions to tax for 1995 are correct, and we so

hold.

     In the absence of any dispute as to a material fact in this

case, we shall grant respondent's motion for summary judgment.

     Finally, we consider whether a penalty should be imposed

under section 6673.   Section 6673(a)(1) provides that, whenever

it appears to the Tax Court that the taxpayer's position in a

proceeding is frivolous or groundless, the Court may impose a

penalty not in excess of $25,000.   This Court has often imposed

such penalties on taxpayers who make frivolous tax protester

arguments.   See, e.g., Coulter v. Commissioner, 82 T.C. 580, 584-

586 (1984); Abrams v. Commissioner, 82 T.C. 403, 408-413 (1984);

Wilkinson v. Commissioner, 71 T.C. 633, 639-643 (1979); Philips
                              - 7 -


v. Commissioner, T.C. Memo. 1995-540, affd. without published

opinion 99 F.3d 1146 (9th Cir. 1996); Santangelo v. Commissioner,

T.C. Memo. 1995-468, affd. without published opinion 87 F.3d 1322

(9th Cir. 1996); McNeel v. Commissioner, T.C. Memo. 1995-211,

affd. without published opinion 76 F.3d 387 (9th Cir. 1996);

Devon v. Commissioner, T.C. Memo. 1995-206.

     In a previous case involving petitioner, White v.

Commissioner, T.C. Memo. 1997-459 (White I), that involved his

1992, 1993, and 1994 taxable years and the receipt of income from

the same payors that are in issue in this case, we stated:

          Consistent with * * * [Parker v. Commissioner, 117 F.3d
     785, 787 (5th Cir. 1997)], we hold that petitioner has
     failed to state a claim upon which relief may be granted.
     In short, petitioner's assertion that respondent erred in
     relying on reports from third-party payors in determining
     the deficiencies in dispute, standing alone, carries no
     weight. * * *

          Section 6673(a)(1) authorizes the Tax Court to require
     a taxpayer to pay to the United States a penalty not in
     excess of $25,000 whenever it appears that proceedings have
     been instituted or maintained by the taxpayer primarily for
     delay or that the taxpayer's position in such proceeding is
     frivolous or groundless. The circumstances here suggest
     that petitioner may have instituted this proceeding
     primarily for purposes of delay. However, we shall not now
     impose a penalty under section 6673(a)(1). Nonetheless we
     take this opportunity to admonish petitioner that the Court
     shall strongly consider imposing such a penalty if he
     returns to the Court and makes similar arguments in the
     future.

     Even though the Court dismissed White I, petitioner filed

his petition in this case using the same arguments as in White I,

even after we cautioned him that we would strongly consider
                                 - 8 -


imposing a penalty if he returned to the Court and made similar

arguments.   Accordingly, pursuant to section 6673, we will impose

a penalty on petitioner in the amount of $5,000.

     To reflect the foregoing,

                                         An order granting respondent's

                                 motion for summary judgment and

                                 penalty and decision will be

                                 entered for respondent.
