                        T.C. Memo. 2000-187



                      UNITED STATES TAX COURT



                 ALFRED J. MARTIN, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent

         ALFRED J. MARTIN, JR. and AMILU S. ROTHHAMMER
             f.k.a. AMILU S. MARTIN, Petitioners v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket Nos. 32146-86, 22961-88.1   Filed June 27, 2000.



     Patricia Tucker, for petitioner.

     Pamelya P. Herndon, for respondent.



             MEMORANDUM FINDINGS OF FACT AND OPINION


     COLVIN, Judge:   Respondent determined deficiencies and

additions to tax in these consolidated cases as follows:


     1
        These cases were consolidated for trial, briefing, and
opinion.
                                    - 2 -

Alfred J. Martin, Jr. and Amilu S. Rothhammer, Docket No. 22961-88

                                                 Addition
                                                  to tax
          Year         Deficiency                Sec. 6659
          1980          $56,771                   $16,085

                 Alfred J. Martin, Docket No. 32146-86

                                                 Additions to tax
          Year         Deficiency           Sec. 6651 Sec. 6653(a)(1)
          1981          $14,827                  $81       $1,067
          1982              298                                15

     After concessions, the issues for decision are:

     1.   Whether petitioner2 authorized his name to be included

on a petition filed in this Court (docket No. 22961-88) for tax

year 1980.   We hold that he did not, and thus, we will dismiss

petitioner from that case.3

     2.   Whether petitioner is liable for the addition to tax

for failure to timely file his 1981 return under section 6651(a).

We hold that he is.

     3.   Whether petitioner is liable for the addition to tax

for negligence for 1981 and 1982 under section 6653(a)(1).     We

hold that he is.




     2
        References to petitioner are to Alfred J. Martin.
Section references are to the Internal Revenue Code in effect for
the years in issue. Rule references are to the Tax Court Rules
of Practice and Procedure.
     3
        Consequently, we lack jurisdiction to decide whether the
time for respondent to assess petitioner’s 1980 tax liability has
passed.
                                 - 3 -

                           FINDINGS OF FACT

     Some of the facts are stipulated and are so found.

A.   Petitioners

     Petitioner lived in Suffolk, Virginia, on August 4, 1986,

when the petition for tax years 1981 and 1982 (docket No. 32146-

86) was filed.     When the petition was filed for tax year 1980 in

docket No. 22961-88, on September 6, 1988, petitioner lived in

Suffolk, Virginia, and petitioner Amilu S. Rothhammer

(Rothhammer), formerly Amilu S. Martin, lived in Colorado

Springs, Colorado.

     Petitioners are both medical doctors.      In 1980, petitioner

and Rothhammer were married to each other and were practicing

medicine in Colorado Springs, Colorado.       Steven Covalt (Covalt),

a certified public accountant, prepared their joint 1980 Federal

income tax return.    Covalt was petitioner’s and Rothhammer’s

accountant from 1972 until 1981 and was petitioner’s accountant

until 1986.   On November 1, 1981, petitioner signed a Form 2848,

Power of Attorney, in which he authorized Covalt to represent him

before the Internal Revenue Service (IRS).

     Petitioner and Rothhammer were divorced in 1981 and have not

had any direct contact with each other since then.      Any indirect

contact between them has been through counsel.      In the divorce

settlement, petitioner and Rothhammer agreed to share equally any

income tax liability for 1980.

     In June 1982, petitioner reentered the Navy as a captain in
                                 - 4 -

the medical corps.   While in the Navy, he spent about 6 months

each year at sea on dates not stated in the record.      At a date

not stated in the record, he moved to Rockville, Maryland, and

became Chief of Vascular Surgery at Bethesda Naval Hospital.       In

1986 he left active duty and moved to Suffolk, Virginia, where he

practiced medicine until 1993.

     Petitioner hired Arthur Robb (Robb), a certified public

accountant, to prepare his income tax returns, when he moved to

Suffolk, Virginia.   Petitioner signed a Form 2848, in which he

authorized Robb to represent him before the IRS.      Petitioner

never authorized Robb to hire an attorney for him.

     In 1993, petitioner moved to Santa Fe, New Mexico, and began

a solo practice in general thoracic and vascular surgery.

B.   The Partnerships in Which Petitioner Invested and Counsel
     for Those Partnerships

     Before 1980, 1981, and 1982, petitioner and Rothhammer

bought limited partnership interests in Winchester Oil, Synergy

Resources, and other partnerships.       Winchester Oil was one of the

Manhattan group partnerships (Manhattan).      Manhattan was a group

of 20 partnerships which were involved in the Elektra-Hemisphere

cases tried by this Court.   The general partners of Manhattan

hired the law firm of Zobrist, Vienna & McCullough (Zobrist) to

file petitions at the request of any of the limited partners.

Attorneys Michael Matthias (Matthias) and Jeffrey Berg (Berg),

and paralegal Bruce Morton (Morton), handled the Manhattan cases
                                - 5 -

for Zobrist.    Matthias and Berg left Zobrist in 1988 to form

their own law firm, Matthias & Berg.    Matthias became lead

counsel in the test case for the Manhattan group around 1986.

Zobrist, and later Matthias & Berg, represented more than 4,000

limited partners.    Zobrist and Matthias & Berg filed several

petitions for most of the limited partners that they represented.

The two firms filed more than 14,000 petitions for limited

partners.

     The following typically occurred when Matthias & Berg

prepared petitions for Manhattan limited partners:    (1) The firm

received a letter with a copy of a notice of deficiency from the

limited partner, or an accountant or other attorney; (2) the

paralegals prepared petitions on behalf of anyone named in the

notice of deficiency; (3) Matthias or Berg reviewed and signed

the petition; (4) the paralegals sent a transmittal letter to the

limited partner with a copy of the petition; (5) the paralegals

placed copies of any correspondence in the client’s case file;

and (6) the limited partner paid the firm a $120 fee for each

petition filed.

C.   The Notices of Deficiency and Petitions in These Cases

     1.     Tax Years 1981 and 1982 (Docket No. 32146-86)

     Petitioner filed his income tax return for 1981 on December

31, 1982, and for 1982 on January 2, 1984.    Respondent mailed a

notice of deficiency for tax years 1981 and 1982 to petitioner on

May 15, 1986, at 1 Lily Pond Court, Rockville, Maryland, his last
                               - 6 -

known address.   Petitioner received the notice of deficiency.     He

wrote a letter to Zobrist on May 20, 1986, in which he said that

he was a limited partner in Winchester Oil and asked for advice.

Petitioner attached a copy of the 1986 notice of deficiency to

that letter.   On July 25, 1986, Zobrist sent a letter to

petitioner and Rothhammer informing them that a petition had been

mailed on their behalf and enclosing a copy.    The petition was

filed on August 4, 1986, at docket No. 32146-86.

     2.   Tax Year 1980 (Docket No. 22961-88)

     On June 7, 1988, respondent sent a notice of deficiency for

1980 addressed to both petitioners at P.O. Box 886, Suffolk,

Virginia 23434, petitioner’s last known address, and to both

petitioners at Rothhammer’s Colorado Springs address.    The U.S.

Post Office returned to respondent the envelope containing the

notice that had been sent to Suffolk, Virginia.    The envelope was

marked “undeliverable as addressed, no forwarding order on file.”

Respondent sent to Covalt, and Covalt received, a copy of that

notice of deficiency.   On June 20, 1988, Covalt wrote a letter to

Zobrist (copy to Rothhammer) stating that respondent had sent a

notice of deficiency for 1980 to Rothhammer and petitioner and to

ask Zobrist to contact Rothhammer.     Covalt also wrote a letter to

Robb (copy to Rothhammer) on June 20, 1988, in which he enclosed

a copy of the notice of deficiency for 1980 to ensure that Robb

knew that respondent had sent it to petitioner.

     On August 29, 1988, Berg signed the petition for taxable
                                   - 7 -

year 1980 (docket No. 22961-88) on behalf of petitioner and

Rothhammer.       Matthias and Berg mailed it on August 29, 1988.     It

was filed with this Court on September 6, 1988.

       On August 29, 1988, Berg wrote to Rothhammer in Colorado to

notify her that his firm had filed three petitions on her behalf

for 1980, 1981 and 1982.4      Berg sent copies of that letter to

Covalt and Robb, but not to petitioner.        Berg did not place a

copy of this letter in petitioner’s file.

       Robb spoke to Morton by telephone on August 31, 1988.      On

September 12, 1988, Morton sent a letter to Robb with copies of

the two petitions filed on petitioner’s behalf.        Morton did not

send a copy of the letter or the petition to petitioner.

D.     Petitioner’s Letters

       On May 8, 1996, Berg wrote a letter to petitioner and

Rothhammer in which he referred to:        “Re:   Elektra/Hemisphere Tax

Court Litigation, Docket No. 22961-88” and asked for instructions

on how to proceed with settlement.         Petitioner responded with a

letter to Berg on June 2, 1996, in which he also referred to:

“Re:       Elektra/Hemisphere Tax Court Litigation, Docket No. 22961-

88”.       Petitioner used the docket number that Berg had used

without realizing the significance of the fact that he had a

second docket number.       In the letter, petitioner thanked Berg for

       4
        There is no explanation in the record of why Berg’s
letter refers to three petitions for Rothhammer for tax years
1980, 1981, and 1982 when petitioner had two petitions for those
years.
                                - 8 -

representing him, said that he was prepared to pay his half of

the income tax liability, and said that Rothhammer was

responsible for the remaining half of the tax liability.

     On August 2, 1996, Matthias wrote a letter to petitioner and

Rothhammer in which he referred to:     “Re:   Elektra/Hemisphere Tax

Court Litigation, Docket No. 22961-88” and sought joint

instructions for how to proceed in the Tax Court case.

Petitioner responded with a letter to Matthias on August 9, 1996,

in which he again referred to docket No. 22961-88 and enclosed a

check for $50,000 toward a “good faith settlement.”     Matthias &

Berg forwarded the check to respondent as payment against

potential tax liability for 1980.   Respondent applied it to

petitioner’s and Rothhammer’s 1980 tax liability.     Petitioner

used the other docket number on another letter when writing about

the same $50,000 payment.    Petitioner sent or received nine other

letters which referred to docket No. 22961-88.     Petitioner

believed that he had only one Tax Court case when he wrote these

letters.

E.   The Court’s Order To Show Cause Hearing

     In response to respondent’s subpoena and on a date not

specified in the record, Matthias searched Matthias & Berg’s

files to prepare for a hearing on an Order to Show Cause in

docket No. 22961-88.   He discovered that the firm had two files

for petitioner, even though Matthias & Berg usually had one file

for each of their clients.   They had a third file for Rothhammer.
                                 - 9 -

Matthias & Berg’s files do not indicate whether they had sent

petitioner any notice that they filed the 1988 petition, or

contain a copy of the notice of deficiency for 1980 addressed to

petitioner.

     Berg filed a motion to withdraw as counsel in docket No.

22961-88 on November 12, 1998.    There was an Order to Show Cause

hearing on November 17, 1998.    Berg’s motion to withdraw was

granted on November 17, 1998.5    Petitioner first learned that

petitions had been filed for him in two cases during the Order to

Show Cause hearing on November 17, 1998.      At the hearing,

petitioner contended that we lacked jurisdiction because he had

not authorized a petition to be filed and asked for a hearing on

that issue.   On November 17, 1998, petitioner signed a

stipulation of settled issues on all issues for docket No. 22961-

88 except whether we have jurisdiction as to him.

                                OPINION

A.   Whether the Tax Court Lacks Jurisdiction Because Petitioner
     Did Not Authorize or Ratify the Filing of the Petition

     Respondent contends that the Tax Court has jurisdiction over

petitioner in docket No. 22961-88 because he authorized or

ratified the filing of his petition.      We disagree.

     Berg signed the petition for petitioner and Rothhammer for

their 1980 tax year.   The appearance of an attorney on behalf of


     5
        Berg’s motion to withdraw as counsel in docket No. 32146-
86, was filed on Jan. 24, 1989, and granted on Jan. 26, 1989.
                               - 10 -

a person creates a presumption that the attorney has the

authority to represent that person.     See Osborn v. United States

Bank, 22 U.S. (9 Wheat.) 738, 830 (1824); Gray v. Commissioner,

73 T.C. 639, 646-647 (1980).   However, petitioner has overcome

that presumption.   He testified credibly that he did not

authorize Berg or anyone else to prepare, sign, and file a

petition for his 1980 tax year, and that he did not authorize

Covalt, Robb, or anyone else to retain counsel for him.     There is

no evidence that petitioner, Covalt, or Robb authorized Berg or

anyone else to sign a petition for petitioner’s 1980 tax year.

      The paralegals in Berg’s law firm prepared petitions for

each name that appeared on a notice of deficiency that they

received.   We believe that the paralegals in Berg’s law firm

prepared a petition for petitioner because his name was on the

notice of deficiency that they received.    Petitioner did not know

about the notice of deficiency for 1980 until the Order to Show

Cause hearing.   We conclude that petitioner did not authorize

Berg to sign and file the petition for 1980 in docket No. 22961-

88.

      Respondent points out that petitioner sent and received

letters that referred to docket No. 22961-88 and that he appeared

at the Order to Show Cause held on November 17, 1998, and settled

the merits of that case.   Respondent contends that petitioner

ratified the petition in docket No. 22961-88 by this conduct.     We

disagree.
                               - 11 -

     Petitioner credibly testified that he did not know that he

had two cases pending in this Court until he appeared at the

Order to Show Cause hearing.   He copied the docket number from

the letter he received without knowing that two petitions had

been filed in his name.   Petitioner used one docket number on a

letter that he wrote about his $50,000 payment.    He used the

other docket number on another letter when writing about the same

$50,000 payment.   When he appeared at the hearing on the Order to

Show Cause in docket No. 22961-88, he contended that we lack

jurisdiction over that case.   We conclude that he has not

ratified the 1980 petition.

     Respondent points out that Matthias believed that petitioner

knew he was a petitioner in docket No. 22961-88.    Matthias based

this belief on several letters his firm had received from

petitioner that had one or the other docket number, including one

thanking Berg for representing petitioner in a letter that

referred to docket No. 22961-88.    We give Matthias’ opinion

little weight because he had no personal knowledge about the 1980

petition or the case in docket No. 22961-88.    In contrast,

petitioner credibly testified that he did not know what the

docket numbers meant and he did not pay attention to them.

     Respondent contends that petitioner authorized Covalt or

Robb to ratify the petition in docket No. 22961-88.    We disagree.

Petitioner did not authorize them to ratify the filing of the

petition, and they did not do so.    Covalt mailed a copy of the
                              - 12 -

notice of deficiency for 1980 to Robb and suggested that they

consider filing a petition.   On June 20, 1988, Covalt wrote a

letter to Zobrist (with a copy to Rothhammer) stating that

respondent had sent a notice of deficiency for 1980 to Rothhammer

and petitioner and to ask Zobrist to contact Rothhammer.       Robb

spoke to Morton at Matthias & Berg on August 31, 1988, 2 days

after Matthias & Berg mailed the petition.

     Respondent points out that petitioner authorized Covalt and

Robb to represent him before the IRS.    However, neither Covalt

nor Robb authorized or ratified the filing of the petition in

docket No. 22961-88.

     Respondent contends that petitioner authorized the general

partners in the Manhattan group to retain Matthias & Berg to file

the 1980 petition for petitioner.    We disagree.     There is no

evidence to support that theory, and petitioner credibly

testified that he did not authorize anyone to file the 1980

petition for him.

     Respondent contends that these cases are like Morgan v.

Commissioner, T.C. Memo. 1990-338.     We disagree.    The taxpayer in

Morgan learned about the notice of deficiency and petition after

her attorney mailed it but before the petition was filed.       The

taxpayer took no action to stop or repudiate the filing.       Here,

petitioner objected to our jurisdiction over docket No. 22961-88

when he first realized that a second petition had been filed.

     We conclude that petitioner did not file, authorize anyone
                                - 13 -

to file, or ratify the filing of a petition for his 1980 tax

year.     Thus, we lack jurisdiction over petitioner’s 1980 tax

year.     Consequently, we lack jurisdiction to decide whether the

time for respondent to assess petitioner’s 1980 tax liability has

passed.

B.   Whether Petitioner Had Reasonable Cause To File His 1981
     Return Late

        Petitioner contends that he had reasonable cause to file his

1981 income tax return late because he was at sea for up to 6

months in 1982 and he lived in Maryland rather than Colorado

where the Synergy Resources project was based.     We disagree.

        A taxpayer is liable for an addition to tax of up to 25

percent for failure to timely file Federal income tax returns

unless the taxpayer shows that such failure was due to reasonable

cause and not willful neglect.     See sec. 6651(a)(1).   To prove

reasonable cause, a taxpayer must show that he or she exercised

ordinary business care and prudence and was nevertheless unable

to file the return within the prescribed time.     See Crocker v.

Commissioner, 92 T.C. 899, 913 (1989); sec. 301.6651-1(c)(1),

Proced. & Admin. Regs.     Petitioner reentered the Navy in June

1982.     He has not shown that being at sea or living in Maryland

prevented him from timely filing his 1981 return.     We conclude

that petitioner has not shown that he had reasonable cause to

file his 1981 return late.
                              - 14 -

C.   Whether Petitioner Is Liable for the Addition to Tax for
     Negligence in 1981 and 1982

     Respondent determined and contends that petitioner is liable

for the addition to tax for negligence under section 6653(a)(1)

for 1981 and 1982.   Petitioner did not dispute respondent’s

contention at trial or on brief even though petitioner bears the

burden of proof on this issue.   See Rule 142(a).   We treat

petitioner’s failure to dispute respondent’s contention as his

concession that respondent’s determination is correct.    See

Bradley v. Commissioner, 100 T.C. 367, 370 (1993); Stringer v.

Commissioner, 84 T.C. 693, 706 (1985), affd. without published

opinion 789 F.2d 917 (4th Cir. 1986); Bernstein v. Commissioner,

22 T.C. 1146, 1152 (1954), affd. per curiam 230 F.2d 603 (2d Cir.
                             - 15 -

1956); Lime Cola Co. v. Commissioner, 22 T.C. 593, 606 (1954).

     To reflect concessions and the foregoing,


                                        An appropriate order

                                   will be issued granting

                                   petitioner Alfred J. Martin’s

                                   motion to dismiss as to him

                                   in docket No. 22961-88 for

                                   lack of jurisdiction, decision

                                   will be entered in docket No.

                                   22961-88 as to petitioner

                                   Amilu S. Rothhammer, f.k.a

                                   Amilu S. Martin, under Rule

                                   155, and decision will be

                                   entered in docket No. 32146-86

                                   under Rule 155.
