                        T.C. Memo. 1998-208



                      UNITED STATES TAX COURT



          SHARIF M. AND AMAL BATTIKHI, Petitioners v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 26471-96.              Filed June 16, 1998.



     Sharif M. Battikhi and Amal Battikhi, pro se.

     Gretchen A. Kindel, for respondent.



                        MEMORANDUM OPINION


     COLVIN, Judge:   This matter is before the Court on

respondent's motion for summary judgment.     For reasons stated

below, we grant respondent's motion.

     Respondent determined a deficiency in petitioners' Federal

income tax for 1992 of $8,758 and determined that petitioners are

liable for the accuracy-related penalty for negligence under
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section 6662(a) in the amount of $1,752.   Neither party requested

a hearing and we conclude that none is necessary to decide

respondent's motion.

     References to petitioner are to Sharif M. Battikhi.    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.

                            Background

     Petitioners are married and lived in San Diego, California,

when they filed their petition.

     In the notice of deficiency, respondent determined that

petitioner received $34,824 in unreported income in 1992.    After

concessions, respondent now contends that petitioner received

$28,887.90 in unreported income in 1992.

     About 5 months before trial, we served the parties with

notice setting this case for trial at a session in San Diego.

Soon thereafter, respondent asked petitioners to provide

information and invited them to attend a pretrial conference.

Petitioners did not respond to that letter.    Respondent also gave

petitioners a copy of their monthly bank statements for 1992 and

a copy of the revenue agent's bank deposits analysis showing how

the agent reconstructed petitioners' income.

     Respondent invited petitioners to attend pretrial

conferences three other times.    Petitioners did not attend any of

them.   Instead, petitioners gave affidavits to respondent to
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support their position.   Petitioners contended that some of the

bank deposits were nontaxable because petitioners wired the

amounts to orphans in the Middle East.    However, petitioners gave

no documents to respondent to corroborate this claim, and the

affidavits were inconsistent with the bank statements in amounts

and dates.   The bank statements did not show that any of the

amounts had been wired.

     Respondent filed a request for admissions and mailed it to

petitioners about 3 months before the case was calendared for

trial.   Paragraphs 1 through 26 requested admissions about

petitioner's self-employment, residence, 1992 tax return, and

bank account activity, and an admission that they made no

nontaxable deposits in their bank accounts other than those

identified by respondent.   Paragraphs 27 through 41 requested

admissions about the total amount that petitioners deposited in

all of their bank accounts, that the total amount was

compensation to petitioner, and that petitioners failed to report

compensation due to negligence.   Petitioners did not respond to

respondent's request for admissions.    Each statement in a request

for admissions served on a party is deemed admitted unless a

response is served on the requesting party within 30 days after

service of the request.   Rule 90(c).   Thus, petitioners are

deemed to have admitted respondent's requests for admission.

     Petitioners moved without explanation to withdraw the deemed

admissions more than 2 months after respondent filed and served
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the request, and about 1 month before trial.    Petitioners'

accountant helped them to prepare their motion.    Petitioners did

not deny receiving the request for admissions.    In their motion,

petitioners admitted paragraphs 1 through 26 of respondent's

request for admissions and denied paragraphs 27 through 41.

Petitioners offered no explanation for their admissions or

denials.   We denied petitioners' motion.

     In the request for admissions, respondent stated that

petitioner is self-employed as a "Cheikh, or man of the cloth, at

a mosque in San Diego, California."    Petitioners admitted the

truth of that statement.

     Petitioners did not attend the calendar call.

                            Discussion

A.   Petitioners' Deemed Admissions

     Petitioners did not respond to respondent's request for

admissions within 30 days after respondent served the request for

admissions or explain why they did not.

     Rule 90(c) provides:

       (c) Response to Request: Each matter is deemed
     admitted unless, within 30 days after service of the
     request or within such shorter or longer time as the
     Court may allow, the party to whom the request is
     directed serves upon the requesting party (1) a written
     answer specifically admitting or denying the matter
     involved in whole or in part, or asserting that it
     cannot be truthfully admitted or denied and setting
     forth in detail the reasons why this is so, or (2) an
     objection, stating in detail the reasons therefor. The
     response shall be signed by the party or the party's
     counsel, and the original thereof, with proof of
     service on the other party, shall be filed with the
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     Court. A denial shall fairly meet the substance of the
     requested admission, and, when good faith requires that
     a party qualify an answer or deny only a part of a
     matter, such party shall specify so much of it as is
     true and deny or qualify the remainder. An answering
     party may not give lack of information or knowledge as
     a reason for failure to admit or deny unless such party
     states that such party has made reasonable inquiry and
     that the information known or readily obtainable by
     such party is insufficient to enable such party to
     admit or deny. A party who considers that a matter, of
     which an admission has been requested, presents a
     genuine issue for trial may not, on that ground alone,
     object to the request; such party may, subject to the
     provisions of paragraph (g) of this Rule, deny the
     matter or set forth reasons why such party cannot admit
     or deny it. An objection on the ground of relevance
     may be noted by any party but it is not to be regarded
     as just cause for refusal to admit or deny.

     Petitioners' responses in their motion to withdraw deemed

admissions did not comply with Rule 90(c) because they were late

and parts of their blanket denial of requests 27 through 41 are

inconsistent with their admission of requests 1 through 26.    For

example, petitioners admit the total amount they deposited in

each bank account but deny the total for all bank accounts.    They

admit that Exhibit A is a copy of their 1992 income tax return

but deny the amount they report on Schedule C, which is attached

to Exhibit A.   Petitioners did not explain why they responded to

the requests for admissions late and inconsistently.   We deemed

petitioners to have admitted each matter in respondent's request

for admissions.   Rule 90(c), (f).
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     Petitioners admit the following facts.    Petitioner is a

self-employed "Cheikh, or man of the cloth,"1 in San Diego,

California.   During 1992, he received compensation for his

services in that capacity.    During 1992, petitioners had checking

and savings accounts at Wells Fargo Bank.   Petitioners also had a

checking account at Bank of America in 1992.    They had no other

bank accounts.   We deem the following facts to be admitted.

Petitioners deposited in their bank accounts a total of

$28,887.90, all of which was compensation to petitioner for his

services in 1992.   Petitioners received but did not report $36 in

interest income in 1992.   Petitioners reported gross receipts of

$7,255 from petitioner's business on Schedule C of petitioners'

income tax return for 1992.

B.   Summary Judgment

     We may grant summary judgment if the pleadings, answers to

interrogatories, depositions, admissions, affidavits, and any

other acceptable materials show that there is no genuine issue of

material fact and a decision may be rendered as a matter of law.

Rule 121(b); 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).    Summary judgment is

appropriate where, as a result of facts deemed admitted under

Rule 90(c), there is no genuine issue of material fact.    Marshall


     1
      The record does not describe petitioner's position further.
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v. Commissioner, 85 T.C. 267, 272 (1985); Morrison v.

Commissioner, 81 T.C. 644, 651 (1983).

     We conclude that there are no genuine issues of material

fact and that respondent is entitled to a decision as a matter of

law on the issue of petitioners' unreported income.   Rule 121(b).

We sustain the determination, reduced as conceded by respondent,

and hold that petitioners received but did not report $28,887.90

as income for petitioner's services as a religious official in

1992.

C.   Whether Petitioners Are Liable for the Accuracy-Related
     Penalty Under Section 6662(a)

     Respondent determined that petitioners are liable for the

accuracy-related penalty for negligence for 1992 under section

6662(a).

     Taxpayers are liable for a penalty equal to 20 percent of

the part of the underpayment to which section 6662 applies.      Sec.

6662(a).   For purposes of section 6662(a), negligence includes

any failure to make a reasonable attempt to comply with the

provisions of the Internal Revenue Code.   Sec. 6662(c).   The

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

any part of an underpayment if the taxpayer shows that there was

reasonable cause for that part and that the taxpayer acted in

good faith.   Sec. 6664(c)(1).

     Petitioners did not argue that they are not liable for the

accuracy-related penalty in their response to respondent's motion
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for summary judgment.   We treat this as a concession by

petitioners.   Rothstein v. Commissioner, 90 T.C. 488, 497 (1988);

Reaves v. Commissioner, 31 T.C. 690, 722 (1958), affd. 295 F.2d

336 (5th Cir. 1961).    Also, respondent asked petitioners to admit

that they were negligent with respect to the entire underpayment.

In their motion to withdraw deemed admissions, which was filed

more than 2 months after respondent filed and served the request

for admissions, petitioners denied they were negligent.        However,

we deem admitted that petitioners were negligent with respect to

the entire underpayment.

     We conclude that petitioners are liable for the accuracy-

related penalty for 1992 under section 6662(a) for negligence and

that all of the deficiency is due to negligence.

     To reflect respondent's concession and the foregoing,

                                             An appropriate order

                                        and decision will be

                                        entered for respondent.
