                           T.C. Memo. 1996-309



                      UNITED STATES TAX COURT




                JEFFREY PAUL SCHMIDT, Petitioner v.
            COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 19264-94.                      Filed July 9, 1996.



     Jeffrey Paul Schmidt, pro se.

     Lavonne D. Lawson, for respondent.



              MEMORANDUM FINDINGS OF FACT AND OPINION


     PARR, Judge:   Respondent determined deficiencies in and

additions to petitioner's Federal income taxes for taxable years

1989, 1990, and 1991, as follows:

                                            Additions to Tax
     Year       Deficiency        Sec. 6651(a)        Sec. 6654(a)

     1989        $58,895             $13,646                $3,658
     1990         12,258               2,041                   508
                                 - 2 -

     1991          13,391             3,192                728

     After concessions, the issues for decision are:1 (1) Whether

petitioner's motion to dismiss for lack of jurisdiction should be

granted.    We hold that it should not.   (2) Whether petitioner

received unreported income for taxable years 1989, 1990, and

1991.    We hold that he did.   (3) Whether petitioner is liable for

section 6651(a) additions to tax for failure to file a Federal

income tax return for each of the years in issue.2    We hold that

he is.    (4) Whether petitioner is liable for section 6654(a)

additions to tax for failure to pay estimated taxes for each of

the years in issue.    We hold that he is.

     We find the following facts based upon the pleadings of this

case and the deemed admissions contained in respondent's request

for admissions.

                            FINDINGS OF FACT

     At the time the petition was filed, petitioner resided in

Santa Clara, California.

     The case was set for trial on December 4, 1995.    Petitioner

was served with the Court's Standing Pre-Trial Order on June 29,


     1
           At trial, respondent conceded that petitioner's
deficiency for 1989 is $18,609, reduced from the original amount
of $58,895. Correspondingly, for 1989, the addition to tax
pursuant to sec. 6651(a) is $3,574, and the addition to tax
pursuant to sec. 6654(a) is $394. These concessions will be
given effect under Rule 155.
     2
          All section references are to the Internal Revenue Code
in effect for the taxable years in issue, and all Rule references
are to the Tax Court Rules of Practice and Procedure, unless
otherwise indicated.
                               - 3 -

1995, advising the parties to begin discussion as soon as

practicable for purposes of settlement and/or preparation of a

stipulation of facts.   No stipulations of fact were signed in

this case, and, consequently, respondent filed a request for

admissions pursuant to Rule 90 on September 18, 1995.3

     The request advised petitioner that, pursuant to Rule 90, he

had 30 days to respond to the request; petitioner failed to make

a timely response.   Thus, pursuant to Rule 90, all undenied

allegations were deemed admitted.4     However, at trial, the Court

permitted petitioner to take issue with those admissions relating

to petitioner's failure to file Federal income tax returns for

1989, 1990, and 1991.

     In 1989, petitioner worked as an independent contractor for

Applied Materials, Inc.   From this activity, petitioner received


     3
          Respondent simultaneously filed a request for
production of documents pursuant to Rule 72. When petitioner
failed to produce any documents requested, respondent filed a
motion to compel. The Court subsequently issued an order
directing compliance with respondent's request. Petitioner,
claiming that this Court lacks jurisdiction, again failed to
produce any documents, thus frustrating compliance with Rule 91.
Respondent then sought sanctions against petitioner precluding
petitioner from offering any evidence, including testimony, with
regard to those issues addressed in respondent's request for
production of documents. The Court subsequently issued an order
precluding petitioner from offering at trial any exhibits not
previously exchanged with respondent.
     4
          Under Rule 90(c), each matter in a request for
admissions is deemed admitted unless, within 30 days after
service (or within such shorter or longer time as the Court may
allow), the party to whom the request is directed admits or
denies the matter, or objects, stating the reasons for the
objection. See Freedson v. Commissioner, 65 T.C. 333 (1975),
affd. on another issue 565 F.2d 954 (5th Cir. 1978).
                               - 4 -

$17,000 in nonemployee compensation.   Also in 1989, petitioner

worked as an employee for Applied Materials, Inc.   From this

employment, petitioner received wages in the amount of $34,134.

Petitioner also received wages in 1989 from Century Life of

America in the amount of $49, a refund from the Franchise Tax

Board of $17, and interest income of $1,131.

     Petitioner sold his personal residence in 1989 for $145,000

and realized gain on that sale in the amount of $14,973.83.

Thereafter, petitioner did not purchase a principal residence

within 2 years of the above-referenced sale of his personal

residence.

     In 1990, petitioner again worked as an employee for Applied

Materials, Inc.   From this employment, petitioner received wages

of $52,159.   Petitioner also received interest income in the 1990

tax year in the amount of $1,110, and deferred compensation of

$2,437.

     In 1991, the last year in issue, petitioner again worked as

an employee for Applied Materials, Inc.   From this employment,

petitioner received wages of $59,266, and interest income of $34.

     On December 4, 1995, the date of trial, petitioner filed

what he called an "entry of jurisdictional challenge, declaration

and affidavit."   The document was filed as petitioner's motion to

dismiss for lack of jurisdiction.   In support of his motion,

petitioner asserted lengthy tax protester rhetoric challenging

the jurisdiction of the Tax Court and the Constitutional
                                 - 5 -

authority of the United States to tax his income.    At trial, we

reserved our right to rule on that motion at a later time; we

proceeded under the assumption that this Court has jurisdiction.

                               OPINION

Issue 1.   Motion to Dismiss for Lack of Jurisdiction

     Petitioner asserts that this Court lacks jurisdiction to

hear his case.   Respondent asserts that petitioner's arguments

are standard tax protester rhetoric and have long since been

rejected by this Court.

     It suffices to say that petitioner chose this forum in which

to litigate his tax dispute.   The Court acquired jurisdiction in

this case after a valid notice of deficiency was sent to

petitioner, and he in turn filed a timely petition.       Secs.

6212(a) and (b), 6213(a); Minovich v. Commissioner, T.C. Memo.

1994-39.   Once the Court's jurisdiction is invoked, it remains

unimpaired until we decide the controversy.     Dorl v.

Commissioner, 57 T.C. 720, 722 (1972), affd. per curiam without

opinion 507 F.2d 406 (2d Cir. 1974).     Accordingly, petitioner's

motion to dismiss for lack of jurisdiction is denied.

Issue 2.   Unreported Income

     Respondent determined deficiencies in petitioner's gross

income for the years at issue.    Petitioner asserts that he is a

nonresident alien "without" the taxing authority of the United

States.    Respondent asserts that petitioner is liable for tax on
                               - 6 -

his taxable income, including gain realized on the sale of a

capital asset.

     In general, the determinations made by the Commissioner in a

notice of deficiency are presumed to be correct, and the taxpayer

bears the burden of proving that those determinations are

erroneous.   Rule 142(a); INDOPCO Inc., v. Commissioner, 503 U.S.

79, 84 (1992); Welch v. Helvering, 290 U.S. 111, 115 (1933).

     There is no merit to petitioner's allegations that he is not

subject to Federal income taxes or to any other arguments offered

by petitioner.   See, e.g., Rowlee v. Commissioner, 80 T.C. 1111

(1983); Carroll v. Commissioner, T.C. Memo. 1994-18; McDougall v.

Commissioner, T.C. Memo. 1992-683, affd. per curiam without

published opinion 15 F.3d 1087 (9th Cir. 1993).   We see no need

to catalog and painstakingly address petitioner's contentions,

constitutional or otherwise.   As the Court of Appeals for the

Fifth Circuit remarked, "We perceive no need to refute these

arguments with somber reasoning and copious citation of

precedent; to do so might suggest that these arguments have some

colorable merit."   Crain v. Commissioner, 737 F.2d 1417 (5th Cir.

1984).

     The general rule of section 61(a) is that, except as

otherwise provided by law, gross income includes income from

whatever source derived, including, inter alia:   (1) compensation

for services, section 61(a)(1); (2) gains derived from dealings
                                - 7 -

in property, section 61(a)(3); and (3) interest income, section

61(a)(4).

     The deemed admissions pursuant to Rule 90 establish that

petitioner received income for tax years 1989, 1990, and 1991.

Accordingly, we uphold respondent's deficiency determinations for

the taxable years in issue, as follows:    (1) $18,609 for 1989;

(2) $12,258 for 1990; and (3) $13,391 for 1991.

Issue 3.    Sec. 6651(a) Failure To File

     Respondent determined that the addition to tax for failure

to timely file a tax return was applicable for each of the years

at issue.    Petitioner asserts that he is a nonresident alien and

therefore not required to file.

     An income tax return must be filed by all individuals

receiving gross income in excess of certain minimum amounts.

Sec. 6012; sec. 1.6012-1(a), Income Tax Regs.    For 1989, 1990,

and 1991, petitioner's gross income, as defined in section 61(a),

was well in excess of the minimums in section 6012.    Therefore,

petitioner was required to file Federal income tax returns for

1989, 1990, and 1991.    Secs. 6011, 6012(a)(1)(A), 7701(a)(1);

sec. 1.6012-1, Income Tax Regs.    That is, petitioner was required

to file returns and pay the tax imposed on every person filing

such returns, in accordance with section 1.

     Section 6651(a) imposes an addition to tax for failure to

timely file a return, unless the taxpayer establishes: (1) the

failure did not result from willful neglect; and (2) the failure
                                 - 8 -

was due to reasonable cause.     United States v. Boyle, 469 U.S.

241, 245-246 (1985).   Petitioner bears the burden of proof on

this issue.   Rule 142(a); Baldwin v. Commissioner, 84 T.C. 859,

870 (1985).   Petitioner failed to prove reasonable cause for his

failure to file.   Accordingly, the addition to tax for failure to

file returns under section 6651(a) is sustained.

Issue 4.   Sec. 6654(a) Failure To Pay Estimated Tax

     Respondent determined that petitioner was liable for the

addition to tax under section 6654(a) for failure to pay an

estimated tax for 1989, 1990, and 1991.       Where payments of tax,

either through withholding or by making estimated quarterly tax

payments during the course of the year, do not equal the

percentage of total liability required under the statute,

imposition of the addition to tax under section 6654(a) is

automatic, unless petitioner shows that one of the statutory

exceptions applies.    Niedringhaus v. Commissioner, 99 T.C. 202,

222 (1992); Grosshandler v. Commissioner, 75 T.C. 1, 20-21

(1980).    Petitioner bears the burden of proving qualification for

such exception.    Habersham-Bey v. Commissioner, 78 T.C. 304, 319-

320 (1982).   Petitioner has not met this burden.      We therefore

sustain respondent on this issue.

     To reflect the foregoing,

                                              An appropriate order will

                                         be issued, and decision will

                                         be entered under Rule 155.
