                          T.C. Memo. 1996-370



                        UNITED STATES TAX COURT



              MICHAEL AND MICHELLE ROUGH, Petitioners v.
             COMMISSIONER OF INTERNAL REVENUE, Respondent



        Docket No. 8354-94.                     Filed August 12, 1996.



        Michael Rough, pro se.

        Gregory M. Hahn, for respondent.



                          MEMORANDUM OPINION


        DINAN, Special Trial Judge:   This case was heard pursuant

to the provisions of section 7443A(b)(3) and Rules 180, 181, and

182.1


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

     Respondent determined a deficiency in petitioners' 1991

Federal income tax in the amount of $1,283.

          After concessions2, the issues for decision are: (1)

Whether petitioners underreported their income for 1991; and

(2) whether respondent's oral motion for a penalty under section

6673 should be granted.

     Some of the facts have been stipulated and are so found.

The stipulations of fact and attached exhibits are incorporated

herein by this reference.   Petitioners resided in Federal Way,

Washington, on the date the petition was filed in this case.

Hereinafter, references to petitioner in the singular are to

Michael Rough.

     In 1991, petitioner sold Amway products for which he was

compensated in the form of a sales commission.   In 1991, in

connection with his sales commissions from his Amway business,

petitioner received a Form 1099 from Don and Roberta Langeliers

in the amount of $1,957.54 (Langeliers Form 1099) and a Form 1099

from Sean and Jade Mullaney in the amount of $2,614.61 (Mullaney

Form 1099).

     On their 1991 Federal income tax return, petitioners failed

to report petitioner's sales commission income or any related

expenses in connection with petitioner's Amway sales business.


     2
          Petitioner Michael Rough conceded that he received
commissions from his Amway sales business as determined by
respondent with the exception of two checks totaling $94.62.
                               - 3 -

Petitioner acknowledged that during the year in issue he received

Amway sales commissions from the Langeliers and Mullaneys.

Furthermore, petitioner testified that he received the Forms

1099.   However, petitioner stated that the Langeliers Form 1099

was received 6 or 9 months after petitioners' 1991 Federal income

tax return had been filed.   With respect to the Langeliers Form

1099, petitioner conceded that he received the amounts reported

except for two checks totaling $94.62 (missing checks).     The

documentation that supported the Langeliers Form 1099, with the

exception of the missing checks, was admitted into evidence as

respondent's Exhibit E.

     Mr. Langeliers testified at trial that the missing checks

were issued to petitioner and cleared his account, but that he

was unable to obtain copies of the checks.   Petitioner contends

that Mr. Langeliers was unable to produce the missing checks

referred to as check number 2737 and 2738 in the amounts of

$26.10 and $68.52, respectively.   However, petitioner produced no

records to support his testimony that he did not receive the

missing checks.   Furthermore, petitioner was given ample

opportunity to cross-examine Mr. Langeliers; during petitioner's

cross-examination of Mr. Langeliers, instead of addressing the

notice of deficiency, petitioner attempted to introduce into

evidence a document called "CODE BREAKER - The § 83 Equation",

which was marked for identification as petitioners' Exhibit 3.
                              - 4 -

Petitioners' Exhibit 3 is a tax protester harangue.   (More

hereinafter about petitioners' Exhibit 3, for identification.)

     The Court, on four separate occasions, invited petitioner to

address the issues contained in the notice of deficiency and Mr.

Langeliers' testimony as a fact witness.   In pertinent part, the

four occasions when the Court so instructed petitioner are as

follows:

     THE COURT:     We don't want to keep this witness on
                    the stand --

     MR. ROUGH:     Well --

     THE COURT:     -- for anything other than his
                    testimony. His testimony was that he
                    gave you these checks that are in
                    evidence now as E,that he made two other
                    checks to you. I believe he stated the
                    amounts of the checks or the number of
                    the check, and he's been unable to
                    obtain copies of those checks. That is
                    the direct testimony. And your cross-
                    examination will be restricted to the
                    witness' direct testimony.

     MR. ROUGH:     Okay.

     THE COURT:     So the questions you are about to ask
                    him I assume are going to be in regard
                    to the two checks which he could not
                    locate.

     MR. ROUGH:     Okay. Forgive me, for I don't know the
                    correct words on how to - how to say
                    this, so I'll just say it in my own
                    words. Exhibit A [marked for
                    identification as Exhibit 3] will allow
                    me to prove that any -- any citizen off
                    the street would end up agreeing with me
                    after -- after asking questions and
                    referring to Exhibit A, that the label
                    of tax protester attached to me   by the
                    respondent is an incorrect statement.
                                - 5 -

                    And therefore, I think, not being able
                    to submit these to the Court is prevent
                    -- they're preventing me due
                    process.

              *     *     *      *      *   *     *

     THE COURT:     This witness has been sitting here
                    listening to this for awhile. He's not
                    going to sit here too much longer. You
                    have the direct examination which I've
                    highlighted - highlighted. I've told
                    you what it is. If you have questions
                    on cross-examination, I want to hear
                    them and I want to hear them succinctly
                    and quickly so that this witness can be
                    excused.

              *     *     *      *      *   *     *

     THE COURT:     This man is here to answer your
                    questions as to his testimony, not
                    whether or not you can stipulate to them
                    and so forth and so on. You've already
                    told us that you wouldn't do that.
                    That's in the record. What questions do
                    you have to ask him about the checks?

             *     *     *       *      *   *    *

     THE COURT:     * * * What questions do you have to ask
                    of this witness with regard to his
                    direct testimony?

     MR. ROUGH:     I have finished with the witness, your
                    Honor, and I would like --

     THE COURT:     The witness --

     MR. ROUGH:     -- to concede with these proceedings to
                    go directly to federal district court to
                    get my answers.

Under circumstances in which he was given every opportunity to do

so, petitioner failed to ask why Mr. Langeliers was unable to

produce checks 2737 and 2783.
                                - 6 -

     It is readily apparent that petitioner had no intention to

dispute the fact that he had received from Mr. Langeliers in 1991

commissions in the amount of $94.62, a fact which he would not

admit.   It is also readily apparent that petitioner attempted to

use Mr. Langliers as a foil on cross-examination to insinuate

into the record his cherished Exhibit 3 for identification, which

would allow him to expostulate upon the inanities contained

therein.

     Respondent's determinations are presumed correct, and

petitioner bears the burden of proving otherwise.    Rule 142(a);

Welch v. Helvering, 290 U.S. 111, 115 (1933).     Petitioner has

failed to prove that respondent's determination of his unreported

income for 1991 is incorrect.    Indeed, as we have noted supra,

petitioner did not even attempt to prove that respondent's

determination was incorrect.    We hold for respondent on this

issue.

     We turn now to respondent's oral motion to award a penalty

against petitioner under section 6673(a).    In order to better

understand our disposition of respondent's motion, we deem it

appropriate to place the issue in perspective.

     In 1995, David Myrland (Myrland) authored a tax protester

diatribe--"CODE BREAKER - The § 83 Equation".    The text of

Myrland's tirade consists of 62 pages.

     On May 20, 1994, petitioner filed his "Petition Under 90 Day

Notice of Deficiency; Wage Earner, Contractor".
                                - 7 -

     On June 2, 1995, petitioner filed with the Court a motion

for summary judgment.    In support of his motion for summary

judgment, petitioner filed a memorandum consisting of a one-page

"Introduction" and 62 following pages.    The 62 following pages

were a verbatim transcript of Myrland's 1995 tax protester

diatribe, except for technical and irrelevant changes made to

paragraph 3, page 42; paragraph 2, page 53; paragraph 1, page 57;

and paragraph 1, page 58.    In addition, Myrland had added page

53(a) to his diatribe which is not here relevant.

     Upon full consideration of petitioners' June 2, 1995, motion

for summary judgment, including a perusal of petitioners' "carbon

copy" memorandum of Myrland's tax protester diatribe, the Court

denied petitioners' motion for summary judgment on June 7, 1995.

     When this case was called for trial, petitioner appeared at

counsel table with a person who, petitioner stated, "is strictly

just a helper to help me organize this mountain of evidence that

I'm about to present."

     Petitioner's "helper" identified himself as "David Russell

Myrland, centralized authorization file No. 8005-84830R, as an

unenrolled preparer with the Internal Revenue Service, not

employed by them, registered as an unenrolled preparer under that

number."

     Mr. Myrland was ordered by the Court to "move to the back of

the bar", and did so.
                                - 8 -

     Petitioner was not to be deterred.    As noted supra,

petitioner attempted to use respondent's witness, Mr. Langeliers,

as a foil to again subject the Court to Myrland's sottish opus

(Exhibit 3 for identification).   He was not permitted to do so.

     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 record in this case amply demonstrates that petitioners

were not interested in disputing the merits of the deficiency in

income tax as set forth in the notice of deficiency.    Rather, the

record clearly demonstrates that petitioners attempted to use

this Court as a forum to protest the tax laws of this country and

to impose upon this Court their misguided tax protester views.

     Petitioners' position, demonstrated at trial, consists

solely of their reliance on tax protester rhetoric and legalistic

gibberish.    We are also convinced that petitioners instituted and

maintained this proceeding primarily, if not exclusively, for

purposes of delay.   Having to deal with this matter wasted the

Court's time, as well as respondent's.    Moreover, taxpayers with

genuine controversies were delayed.     Petitioner's conduct in this

case was patently egregious.
                                 - 9 -

     In view of the foregoing, we will grant respondent's oral

motion to exercise our discretion under section 6673(a) and

require petitioners to pay a penalty to the United States in the

amount of $500.   Crain v. Commissioner, 737 F.2d 1417, 1417-1418

(5th Cir. 1984); Coulter v. Commissioner, 82 T.C. 580, 584-586

(1984); Abrams v. Commissioner, 82 T.C. 403, 408-411 (1984).

     To reflect the foregoing,

                                         An appropriate order and

                                 decision will be entered.
