                         T.C. Memo. 1996-279



                       UNITED STATES TAX COURT



          DENNIS P. AND DIANA C. RAQUET, Petitioners v.
           COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 26331-88.                        Filed June 17, 1996.




     Lavonne Lawson, for respondent.


             MEMORANDUM FINDINGS OF FACT AND OPINION

     FAY, Judge:    This case is before the Court on respondent's

Motion to Dismiss for Lack of Prosecution as to petitioner

Diana C. Raquet.1   By statutory notices of deficiency dated




     1
      All references to petitioner are to Diana C. Raquet.
                                                 - 2 -

  July 11, 1988,2 respondent determined deficiencies in

  petitioners' Federal income taxes, in the amounts listed below:
                                   Additions to Tax and Increased Interest
                              Sec.       Sec.        Sec.          Sec.       Sec.     Sec.
Year      Deficiency        6621(c)    6653(a)    6653(a)(1)    6653(a)(2)    6659     6661
                               1
1979            $7,010                 $350.50         --            --      $2,103     --
                               1
1980            11,021                  551.00         --            --       3,306     --
                               1                                     2
1981              --                      --          $4.55                    --       --
                               1                                     2
1982              --                      --         256.00                     218   $2,753
   1
       To be determined.
   2
       Fifty percent of the interest due on the deficiency.


            Unless otherwise indicated, 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.             The notice of deficiency for the 1982 tax year

  determined petitioners had a zero deficiency but were liable for

  additions to tax pursuant to sections 6653, 6659, and 6661.

  Respondent contends that the zero deficiency occurred as a result

  of a clerical error in the Schedule of Adjustments, which was

  attached to the notice of deficiency for the 1982 tax year.                         In

  an Amendment to Answer, filed April 12, 1995 (Amendment to

  Answer), respondent corrected the error on the statutory notice

  of deficiency and stated that the correct deficiency is $29,913.

  Respondent contends that she does not bear the burden of proof as



            2
        Respondent issued two notices of deficiency to petitioners.
  Both notices are dated July 11, 1988. In the first notice of
  deficiency, respondent determined deficiencies and additions to
  tax in petitioners' Federal income taxes for the taxable years
  1979, 1980, and 1981. In the second notice of deficiency,
  respondent determined deficiencies and additions to tax in
  petitioners' Federal income taxes for the taxable year 1982.
                                 - 3 -

to the correct deficiency amount for the 1982 tax year because

the error in the deficiency was evident from the other informa-

tion set forth in the notice of deficiency.    The issues for

decision are:

     (1)   Whether respondent bears the burden of proof when

respondent increases a deficiency in her Amendment to Answer when

the increase in deficiency was due to a clerical error in the

notice of deficiency.    We hold that respondent only bears the

burden of establishing the clerical or mathematical error.

Petitioner retains the burden with regard to respondent's sub-

stantive determinations.

     (2)   Whether respondent's Motion to Dismiss for Lack of

Prosecution should be granted.    We hold that it should.

                           FINDINGS OF FACT

     At the time the petition was filed, petitioners resided in

Los Gatos, California.    By two statutory notices of deficiency,

each dated July 11, 1988, respondent determined deficiencies,

additions to tax, and increased interest in petitioners' Federal

income taxes for the tax years 1979, 1980, 1981, and 1982.      The

adjustments determined in the notices of deficiency were with

regard to petitioners' participation in two tax shelter projects:

(1) Encore Leasing Corp. and (2) Kelsey/Soda Lake Mining.

     In the notice of deficiency for the taxable year 1982 (the

notice of deficiency), respondent asserted adjustments of

$93,930.   Thus, respondent increased petitioners' taxable income
                                - 4 -

for the 1982 tax year to $102,665, from $8,735, which was the

amount reported by petitioners.   Based on the increase in taxable

income, respondent determined a tax liability of $38,782 for the

1982 taxable year.   Respondent set forth these determinations in

a Schedule of Adjustments for the 1982 tax year, which was

attached to the notice of deficiency.   Also in the notice of

deficiency, respondent determined additions to tax for negli-

gence, overvaluation, and substantial understatement and

additional interest.

     Respondent contends that, due to a clerical error, despite

the above adjustments, the amount of the deficiency, ultimately

reflected in the notice of deficiency, was zero.   The error

occurred in the Schedule of Adjustments for the 1982 tax year.

Page 1 of the Schedule of Adjustments indicates that petitioners

reported taxable income of $8,735 for 1982.   Page 2 of the

Schedule of Adjustments states that petitioners on the same

return reported $38,782 in Federal income taxes.   This amount is

actually the amount that respondent claims is petitioners'

liability for taxes for 1982.   Respondent placed the $38,782 in

the column for the amount of the reported liability on peti-

tioners' 1982 Federal income tax return.   The amount of tax in

fact reported on petitioners' 1982 Federal income tax return was

zero.   Respondent contends that an amount of zero should have

been placed in the space for total tax per return on the Schedule

of Adjustments.   The zero, subtracted from the total corrected
                                - 5 -

income tax liability of $38,782, would have led to the statement

of the deficiency as $38,782.

     On February 6, 1989, the parties filed with the Court a

Partial Stipulation of Settlement with regard to the Kelsey/Soda

Lake Mining issues.   In the Partial Stipulation of Settlement,

petitioners agreed to an adjustment of $85,000 for the 1982 tax

year with regard to the Kelsey/Soda Lake Mining tax shelter

project.   Additionally, petitioners conceded the addition to tax

for overvaluation with respect to the $85,000 adjustment.

Respondent agreed to concede the addition to tax for negligence

with regard to the $85,000 adjustment.   Also, petitioners were

granted the opportunity to claim a theft loss for substantiated

cash out-of-pocket.

     On October 8, 1992, petitioners' attorneys filed a Motion

for Withdrawal of Counsel.   In the motion, petitioners' attorneys

state that they have tried "to obtain direction from petitioners

concerning a potential settlement of this case.   To date, we have

been unable to receive any commitment from petitioner Dennis

Raquet and we have received no communication whatsoever from

Diana Raquet."3




     3
      The Motion for Withdrawal of Counsel also listed peti-
tioners as having separate addresses. The record is unclear as
to when petitioners were married and whether they remain married.
The only evidence of petitioners' marriage is that they jointly
filed a Federal income tax return for the 1982 tax year.
                               - 6 -

     On August 22, 1994, respondent sent a Branerton letter,

Branerton Corp. v. Commissioner, 61 T.C. 691 (1974), to     peti-

tioner, in which respondent invited petitioner to a conference at

respondent's San Jose, California, office.   In the letter,

respondent also suggested that petitioner assemble all documenta-

tion which she planned to use to support her case in trial.

Respondent also sent the same Branerton letter, Branerton Corp.

v. Commissioner, supra, to petitioner Dennis P. Raquet, except

that respondent requested a conference with him on a different

date.

     Petitioner Dennis P. Raquet did subsequently meet with

respondent.   Petitioner Diana C. Raquet, however, failed to

attend the conference and never furnished respondent with the

requested documentation.

     By means of a notice setting case for trial, served upon

petitioners, petitioners were informed that this case was

calendared for trial in Los Angeles, California, with a time and

date certain.   This notice included the following paragraphs:

          The calendar for that Session will be called at
     10:00 A.M. on that date and both parties are expected
     to be present at that time and be prepared to try the
     case. YOUR FAILURE TO APPEAR MAY RESULT IN DISMISSAL
     OF THE CASE AND ENTRY OF DECISION AGAINST YOU.
                                 - 7 -

          Your attention is called to the Court's require-
     ment that, if the case cannot be settled on a mutually
     satisfactory basis, the parties, before trial, must
     agree in writing to all facts and all documents about
     which there should be no disagreement. Therefore, the
     parties should contact each other promptly and coop-
     erate fully so that the necessary steps can be taken to
     comply with this requirement. YOUR FAILURE TO COOP-
     ERATE MAY ALSO RESULT IN DISMISSAL OF THE CASE AND
     ENTRY OF DECISION AGAINST YOU. * * *

      Within the time in which discovery was allowed, respondent,

pursuant to Rule 72, served on petitioners Respondent's Request

for Production of Documents.   Petitioners failed to respond to

Respondent's Request for Production of Documents and Respondent's

Request for Admissions.   Thus, respondent filed with the Court a

Motion to Compel Production of Documents.      Based on respondent's

Motion to Compel Production of Documents, the Court issued an

order granting respondent's Motion to Compel Production of Docu-

ments and ordering petitioners to produce within 30 days those

documents requested in respondent's Request for Production of

Documents.   The order also stated:      "in the event petitioners do

not fully comply with the provisions of this order, this Court

will be inclined to impose sanctions pursuant to Tax Court Rule

104, which may include dismissal of this case and entry of a

decision against petitioners."

     After the Court granted respondent's Motion to Compel

Production of Documents, respondent spoke with petitioner and

discussed possible ways to settle this case.      Pursuant to this

conversation, respondent wrote petitioner a letter in which
                               - 8 -

respondent requested that petitioner determine how she wanted to

resolve this case.   In a subsequent conversation with respondent,

petitioner indicated that she had received the letter.

     In another conversation, petitioner notified respondent that

she would not sign a proposed decision document to resolve this

case and that she did not plan to attend the calendar call in Los

Angeles, California.   Based on this information, respondent

informed petitioner that respondent planned to file, at the

calendar call in Los Angeles, California, a Motion to Dismiss for

Lack of Prosecution with regard to petitioner.

     Shortly before the case was called for trial, respondent

filed with the Court a Motion for Leave to File Amendment to

Answer and lodged the Amendment to Answer.    The Court granted

respondent's Motion for Leave to File Amendment to Answer.     In

the Amendment to Answer, respondent notified the Court of the

clerical error in the notice of deficiency.    The Amendment to

Answer also stated that the deficiency asserted for the tax year

1982 was in the amount of $29,913.     The original deficiency for

the 1982 tax year was $38,782; however, the settlement of the

Kelsey/Soda Lake Mining tax shelter issue reduced the 1982

deficiency to $29,913.

     When this case was called for trial in Los Angeles,

California, petitioner did not appear.    At the calendar call,

respondent filed with the Court, on behalf of petitioner

Dennis P. Raquet, a Stipulation of Settlement between Respondent
                               - 9 -

and Petitioner Dennis P. Raquet.   In the Stipulation of Settle-

ment between Respondent and Petitioner Dennis P. Raquet, peti-

tioner Dennis P. Raquet agreed to the deficiencies and additions

to tax for the taxable years 1979 through 1982, including the

increased deficiency of $29,913 for the 1982 tax year.   Also at

the calendar call, respondent filed with the Court a Motion to

Dismiss for Lack of Prosecution as to petitioner Diana C. Raquet.

                              OPINION

Burden of Proof

     Respondent bears the burden of proof with respect to an

increased deficiency.   Here, respondent increased the deficiency

determined in the notice of deficiency in her Amendment to

Answer.   The increase in deficiency was due to a clerical error

in the preparation of petitioner's notice of deficiency.   In the

context of a case such as the one before us, where the increase

in deficiency is based on a clerical or mathematical error in the

notice of deficiency, respondent bears only the burden of estab-

lishing the clerical or mathematical error.   Petitioner retains

the burden with regard to respondent's determinations.   See

Estate of Applestein v. Commissioner, 80 T.C. 331, 347 n.5

(1983); Beck Chem. Equip. Corp. v. Commissioner, 27 T.C. 840, 856

(1957); see also Kiehl v. Commissioner, T.C. Memo. 1986-54; Holtz

v. Commissioner, T.C. Memo. 1982-436.   We find that respondent

has met this burden of establishing the clerical error through
                               - 10 -

the introduction of petitioners' 1982 Federal income tax return

which reported petitioners' amount of tax as zero.

     Alternatively, if respondent were to have the burden of

proof, she could satisfy her burden of proof based on deemed

admissions.   See, e.g., Doncaster v. Commissioner, 77 T.C. 334

(1981); Baldwin v. Commissioner, T.C. Memo. 1984-119.    Pursuant

to Rule 90(c), each matter is deemed admitted unless within 30

days after service of the request the party to whom the request

is directed serves upon the requesting party either (1) a written

answer specifically admitting or denying the matter involved or

(2) an objection.    Respondent issued requests for admissions on

February 8, 1995.    Petitioner never responded to respondent's

requests for admissions.    Thus, even if respondent had the burden

of proof, she would have satisfied her burden of proof with

respect to the increased deficiency, since respondent's requests

are deemed admitted pursuant to Rule 90(c), including an admis-

sion that the deficiency for the taxable year 1982 is in the

amount of $29,913.

Lack of Prosecution

     With respect to respondent's Motion to Dismiss for Lack of

Prosecution as to petitioner Diana C. Raquet, Rules 123(b) and

149(a) provide as follows:

          [Rule 123](b) Dismissal: For failure of a
     petitioner properly to prosecute or to comply with
     these Rules or any order of the Court or for other
     cause which the Court deems sufficient, the Court may
     dismiss a case at any time and enter a decision against
                                    - 11 -

     the petitioner. The Court may, for similar reasons,
     decide against any party any issue as to which such
     party has the burden of proof, and such decision shall
     be treated as a dismissal for purposes of paragraphs
     (c) and (d) of this Rule.

     *         *         *      *        *       *      *       *

          [Rule 149](a) Attendance at Trials: The unexcused
     absence of a party or a party's counsel when a case is
     called for trial will not be ground for delay. The
     case may be dismissed for failure properly to prose-
     cute, or the trial may proceed and the case be regarded
     as submitted on the part of the absent party or
     parties.

     We find that petitioner's failure to cooperate with

respondent during the pretrial period made it impossible for

respondent to conduct negotiations, exchange information, and

stipulate mutually agreeable facts as required by Rule 91(c).

The standing pretrial order has not been complied with by

petitioner, nor have the mandates of the Court in Branerton Corp.

v. Commissioner, 61 T.C. 691 (1974).         Thus, in light of peti-

tioner's conduct in this proceeding and her failure to appear

when the case was called for trial, we conclude that dismissal is

appropriate.       Accordingly, respondent's Motion to Dismiss for

Lack of Prosecution as to petitioner Diana C. Raquet will be

granted.



     To reflect the foregoing,

                                         An appropriate order will be

                                    issued granting respondent's motion

                                    to dismiss, and decision will be
- 12 -

entered for respondent, consistent

with the foregoing.
