                        T.C. Memo. 1999-294



                      UNITED STATES TAX COURT



                   GARY ANDERS, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 5329-97.                 Filed September 2, 1999.



     Gary Anders, pro se.

     James R. Robb, for respondent.



                        MEMORANDUM OPINION


     PARR, Judge:   Respondent determined deficiencies in, and

additions to, petitioner's Federal income taxes as follows:
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                                       Additions to Tax
     Year       Deficiency      Sec. 6651(a)(1)     Sec. 6654
     1986         $4,806            $1,202              $233
     1987          3,294               824               177
     1988         16,668             4,167            1,072
     1989         15,040             3,760            1,017
     1990         36,868             9,217            2,414
     1991         35,951             8,988            2,055
     1992         14,907             3,727               650
     1993          9,485             2,371               397

     On June 21, 1999, the Court granted without objection

respondent's oral motion to dismiss for failure to prosecute

properly.   The sole remaining issue is respondent's Motion To

Impose Damages Under I.R.C. Section 6673.1   The Court grants

respondent's motion in that we require petitioner to pay a

penalty to the United States in the amount of $25,000.

     We combine our findings of fact with our opinion.

                              Background

     At the time the petition in this case was filed, petitioner

resided in Helena, Montana.

     This case was originally set for trial on June 15, 1998.    At

that time, petitioner was represented by counsel.   On March 18,

1998, petitioner's counsel filed a motion to withdraw, which was

granted on April 14, 1998.

     On March 13, 1998, counsel for respondent served on

petitioner Respondent's Request for Production of Documents and



     1
      All section references are to the Internal Revenue Code in
effect for the taxable years in issue.
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Respondent's Interrogatories to Petitioner.    Petitioner never

provided any of the information requested in Respondent's Request

for Production of Documents and never responded to Respondent's

Interrogatories to Petitioner.

     On April 15, 1998, petitioner filed a Motion for

Continuance, which was denied on April 22, 1998.

     On May 4, 1998, respondent filed Motions to Compel Responses

to Respondent's Interrogatories and Production of Documents.      On

May 6, 1998, the Court ordered petitioner to serve on respondent

and file with the Court any objections made in good faith to

production of specific documents by May 26, 1998, and to produce

for inspection and copying by May 28, 1998, all documents

requested in Respondent's Request for Production of Documents

that were not specifically identified as objectionable.    In

addition, the Court ordered petitioner to serve on respondent and

file with the Court objections to any specific interrogatory made

in good faith to Respondent's Interrogatories to Petitioner by

May 26, 1998, and to serve on respondent answers to each

interrogatory that were not specifically objectionable by May 28,

1998.   Petitioner was also warned that if he did not fully comply

with the Court's order of May 6, 1998, the Court might impose

sanctions against him which could include dismissal of his case

and entry of a decision against him.     Petitioner did not comply

with the Court's order of May 6, 1998.
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     On May 27, 1998, petitioner sought protection of the U.S.

Bankruptcy Court for the District of Montana (the Bankruptcy

Court) by filing a petition in bankruptcy.     The bankruptcy case

was dismissed on June 25, 1998.

     On June 9, 1998, before respondent or the Court was notified

of petitioner's pending bankruptcy proceeding, the Court ordered

that petitioner could not introduce any documents identified in

Respondent's Request for Production of Documents and could not

introduce any evidence relating to Respondent's Interrogatories

to Petitioner, which were not provided to respondent by May 28,

1998, unless allowed by the Court for good cause shown.

     On July 15, 1998, petitioner filed a second petition with

the Bankruptcy Court.   The second bankruptcy case was dismissed

on July 31, 1998.

     On September 1, 1998, petitioner filed a third petition with

the Bankruptcy Court.   On October 22, 1998, petitioner's third

bankruptcy case was dismissed for abuse of the bankruptcy

process, and he was enjoined from filing any petition in

bankruptcy for a period of 1 year.     In its discussion, the

Bankruptcy Court stated:

          Based upon Debtor's tactics in the two prior
     Chapter 13 cases, which are repeated and surpassed in
     this case, the Debtor's repeated failures to submit
     conforming Schedules, Statements, and Plans, failure to
     file Statements of Income and Expenses, to answer
     questions under oath regarding his employment, income,
     expenses and tax returns, and to comply with other
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     rules this Court finds that the Debtor is engaged in a
     scheme of abuse of the bankruptcy process. * * * [In
     re Anders, No. 98-22461-13, slip op. at 4 (Bankr. Mont.
     1998).]

The Bankruptcy Court also stated:

     This Debtor has abused the bankruptcy process for his
     own benefit without accepting any of the burdens
     imposed by the Bankruptcy Code and Rules except those
     he deems advantageous. He has burdened the Court, the
     Trustee, and his creditors with sham objections and
     adversary proceedings, which waste their resources
     while he enjoys the protections of the automatic stay
     and proceeds as he deems fit. Debtor sued the
     Bankruptcy Court itself simply for purposes of forum
     shopping. For Debtor's abuse of the bankruptcy
     process, he shall not be permitted to enjoy its
     benefits. * * * [Id. at 11.]

     On January 15, 1999, this case was scheduled for trial in

Helena, Montana, on June 21, 1999.

     On March 21, 1999, respondent sent petitioner a letter

suggesting a telephone conference be held on April 1, 1999, at

9 a.m. to discuss his rescheduled case.   On April 1, 1999,

petitioner stated that he had retained Attorney Clifton Caughron

(Caughron) and that a power of attorney would be provided.

     On April 6, 1999, respondent sent a second letter to

petitioner regarding the need to discuss his rescheduled case.

Respondent received the power of attorney for Caughron on April

13, 1999.

     On April 15, 1999, respondent filed a Motion to Impose

Sanctions.   On April 19, 1999, the Court issued an order granting

respondent's Motion to Impose Sanctions in that petitioner could
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not introduce any documents identified in Respondent's Request

for Production of Documents or any evidence relating to

Respondent's Interrogatories to Petitioner.    The Court also

ordered petitioner to show cause why his case should not be

dismissed for failure to prosecute properly.

       By letter dated May 11, 1999, Caughron informed respondent's

counsel that he was asked by petitioner to withdraw from the

case.    Caughron had not entered an appearance but was operating

under a power of attorney.

       On June 1, 1999, respondent's counsel telephoned petitioner

and left a message for him to return the call in order to discuss

the case.

       On June 4, 1999, petitioner filed a Motion to Withdraw

Petition Due to Inadequate Counsel, which was denied on the same

day.    Also on June 4, 1999, petitioner telephoned respondent's

counsel and said that he had a new representative.    No power of

attorney was provided at that time.

       On June 11, 1999, respondent's counsel telephoned petitioner

and left a message for him to return the call in order to discuss

the case.

       On June 14, 1999, respondent received a power of attorney,

but it did not relate to the years at issue in the case.    On June

15, 1999, petitioner was notified by telephone that the power of

attorney submitted on June 14, 1999, was invalid and that it was
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necessary to meet with him in order to prepare his case for

trial.   Petitioner was also advised that he could bring his new

representative with him to the meeting to prepare his case for

trial.

     Also on June 15, 1999, petitioner was advised in writing

that respondent might file a motion seeking sanctions under

section 6673 because of his failure to meet and discuss the

issues of his case, his various tactics of delay, and his failure

to comply with the Court's orders regarding Respondent's Request

for Production of Documents and Respondent's Interrogatories to

Petitioner.

     On June 16, 1999, petitioner's new representative, Gene

Bridges (Bridges), of Associated Tax Consultants, sent respondent

a letter by facsimile in which petitioner claimed to be a

nonresident alien.   This letter was submitted in lieu of

attending a scheduled conference on June 18, 1999.

                            Discussion

     The Tax Court is authorized under section 6673(a)(1) to

require a taxpayer to pay to the United States a penalty not in

excess of $25,000 when it appears to the Court that the

proceedings have been instituted or maintained by the taxpayer

primarily for delay or if the taxpayer's position in the

proceedings is frivolous or groundless.   See sec. 6673(a)(1)(A)

and (B).   A position maintained by the taxpayer is "frivolous"
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where it is "contrary to established law and unsupported by a

reasoned, colorable argument for change in the law."        Coleman v.

Commissioner, 791 F.2d 68, 71 (7th Cir. 1986); see also Horn v.

Commissioner, 90 T.C. 908, 946 (1988).

     The record in this case convinces us that petitioner was not

interested in disputing the merits of either the deficiencies in

income tax or the additions to tax determined by respondent.

     We are also convinced that petitioner instituted and

maintained this proceeding primarily, if not exclusively, for

purposes of delay.   Petitioner's outrageous tactics of delay,

including his egregious abuse of the bankruptcy process, resulted

in the waste of limited judicial and administrative resources.

Moreover, taxpayers with genuine controversies were delayed.

     Furthermore, petitioner's position, based on stale and

meritless contentions, is manifestly frivolous and groundless.

Claiming status as a nonresident alien in order to avoid Federal

income tax is a hackneyed argument that has been universally

rejected by this and other courts.     See, e.g., Kerr v.

Commissioner, T.C. Memo. 1994-582, affd. without published

opinion 73 F.3d 369 (9th Cir. 1995); see also Haskins v.

Commissioner, T.C. Memo. 1999-106; Harkless v. Commissioner, T.C.

Memo. 1999-58; McQuatters v. Commissioner, T.C. Memo. 1998-88;

Peterson v. Commissioner, T.C. Memo. 1997-463; Heun v.

Commissioner, T.C. Memo. 1997-265; Mancebo v. Commissioner, T.C.
                                 - 9 -


Memo. 1997-46; Swaim v. Commissioner, T.C. Memo. 1996-545;

Schmidt v. Commissioner, T.C. Memo. 1996-309; Wesselman v.

Commissioner, T.C. Memo. 1996-85; Fox v. Commissioner, T.C. Memo.

1996-79; Nagy v. Commissioner, T.C. Memo. 1996-24; Friesen v.

Commissioner, T.C. Memo. 1996-2; Erwin v. Commissioner, T.C.

Memo. 1995-498; Reese v. Commissioner, T.C. Memo. 1995-244;

McGanty v. Commissioner, T.C. Memo. 1995-178; Hacker v.

Commissioner, T.C. Memo. 1994-488.

     In light of the foregoing, we will exercise our discretion

under section 6673 and require petitioner to pay a penalty to the

United States in the amount of $25,000.

     To reflect the foregoing,

                                               An appropriate order

                                          and order of dismissal

                                          and decision will be

                                          entered.
