                            T.C. Memo. 1996-346



                          UNITED STATES TAX COURT



                   CHARLES VERNON ROBERTS, Petitioner v.
               COMMISSIONER OF INTERNAL REVENUE, Respondent


        Docket No. 8581-87.                         Filed July 30, 1996.


        Bradford E. Henschel, for petitioner.


        Anne Stacey Daugharty, for respondent.


                            MEMORANDUM OPINION


        NAMEROFF, Special Trial Judge:    This case was heard pursuant

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

182.1       Respondent determined a deficiency in petitioner's 1983

Federal income tax in the amount of $5,797, plus additions to tax

        1
        Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the year at issue. All
Rule references are to the Tax Court Rules of Practice and
Procedure.
                              - 2 -


under sections 6653(a), 6651(a)(1), 6661(a), and 6654(a) in the

amounts of $289.85, $1,449.25, $579.70, and $354.89,

respectively.

     The issues for decision are:   (1) Whether petitioner filed

his 1983 Federal income tax return; (2) whether respondent should

bear the burden of proof in this case because her position in the

notice of deficiency was arbitrary and unreasonable; (3) whether

respondent is barred by the statute of limitations from

proceeding to assess and collect the 1983 tax liability; (4)

whether petitioner is entitled to joint filing status; (5)

whether petitioner is entitled to a dependency exemption

deduction for his daughter; (6) whether petitioner is entitled to

certain Schedule A itemized deductions; (7) whether petitioner is

liable for the addition to tax under section 6651(a)(1) for

failure to timely file his 1983 return; (8) whether petitioner is

liable for the addition to tax under section 6653(a) for

negligence; (9) whether petitioner is liable for the addition to

tax under section 6661(a) for a substantial understatement of

income tax; and (10) whether petitioner is liable for the

addition to tax under section 6654(a) for failure to make

estimated tax payments.2

     2
        In his brief, petitioner suggested 2 additional issues
which border on the frivolous; viz, whether the Form 1040 is so
ambiguous and unintelligible so as to deprive petitioner of his
"due process notice pursuant to the 4th [sic] Amendment", and
                                                   (continued...)
                                - 3 -


     Some of the facts have been stipulated, and they are so

found.   The stipulation of facts, the supplemental stipulation of

facts, and the attached exhibits are incorporated herein by this

reference.    At the time of the filing of this petition,

petitioner resided in Inglewood, California.

     Petitioner and his wife Evelyn Jean Roberts have one

daughter, Nicole Aileen Roberts, who was born on October 2, 1969.

In 1983, petitioner, Mrs. Roberts, and Nicole resided in the

family home.

     During 1983, petitioner was employed as an engineer by the

Sanitation Department of the County of Los Angeles.    Petitioner

received wages as an employee from the County of Los Angeles in

the amount of $29,029, from which no withholding taxes were

deducted.    In addition, petitioner received interest income in

the amount of $3,305 in 1983.    Petitioner made no estimated tax

payments in 1983.    Mrs. Roberts was unemployed during 1983.

     In 1983, petitioner and Mrs. Roberts owned a residence

located at 2422 West 177th Street in Inglewood, California (the

Inglewood property).    During 1983, petitioner and Mrs. Roberts

made mortgage payments on the Inglewood property, the amounts of

which were not included in the record.    In addition, petitioner

     2
      (...continued)
whether petitioner had a taxable year. Fortunately, however,
petitioner presented no argument in the brief regarding these
issues. Accordingly, we shall not address them nor the potential
exposure to a sec. 6673 penalty.
                               - 4 -


and Mrs. Roberts owned an apartment building which contained nine

units located at 3934 Gibraltar Avenue, Los Angeles, California

(the Gibraltar property).   Petitioner received rental income and

incurred rental expenses with respect to the Gibraltar property,

but no evidence was presented as to the amounts of any such

income or expenses.   Petitioner and Mrs. Roberts also owned

property at 7008 Madden Avenue in Los Angeles.3

     The Internal Revenue Service (IRS) determined that

petitioner failed to file his 1983 Federal income tax return (the

Federal return).   A notice of deficiency was issued to petitioner

on February 10, 1987.   In the notice of deficiency, respondent

determined that petitioner received wages of $29,029, that

petitioner was entitled to one personal exemption of $1,000, and

that petitioner was entitled to single filing status.

     Bradford E. Henschel, petitioner's counsel herein, prepared

petitioner's 1983 Federal return and California State income tax

return (the California return).   Neither petitioner nor Mrs.

Roberts personally mailed or delivered the Federal return to the

Internal Revenue Service Center in Fresno, California, for

filing.   Although neither petitioner nor Mrs. Roberts saw Mr.

Henschel mail the Federal return, they believe he mailed the


     3
        Mrs. Roberts testified that her father lived at the
Madden Avenue property; whereas, petitioner testified that her
father lived at the Gibraltar property. Thus, it is unclear
whether the Madden property was rental property.
                                - 5 -


Federal return.   In addition, petitioner and Mrs. Roberts

believed that they filed a request for extension of time to file

the Federal return.    The record contains a copy of an Application

for Automatic Extension of Time to File Personal Income Tax

Return with regard to the California return, but there is no

indication whether such Application was actually filed with the

State of California.   Neither petitioner nor Mrs. Roberts kept a

copy of the Federal return or the application for extension to

file the Federal return.   Further, there is no credible evidence

in the record as to when a Federal application for extension or a

Federal return may have been prepared and/or mailed.

     On July 10, 1987, petitioner and Mrs. Roberts filed a

petition under Chapter 13 with the U.S. Bankruptcy Court in the

Central District of California in Los Angeles (the bankruptcy

court).   A Proof of Claim for Internal Revenue Taxes was filed by

the IRS with the bankruptcy court on December 4, 1987.   The proof

of claim indicates that petitioner was indebted to the United

States in the amount of $55,134.52 as of the date the petition

was filed with the bankruptcy court.    The attachment to the proof

of claim indicates that as of December 17, 1984, no tax had been

assessed for 1983, but that a penalty of $520 and interest of

$153.49 had been assessed for 1983.4

     4
        According to the attachment to the proof of claim of the
IRS, the bulk of the claimed indebtedness pertained to assessed
                                                   (continued...)
                                 - 6 -


     Petitioner contends that the notice of deficiency is

arbitrary, unreasonable, and barred by the statute of

limitations.   In addition, petitioner argues that respondent

should bear the burden of proof.    Further, petitioner contends

that he filed the Federal return and that he is entitled to

either married filing joint or married filing separate status, a

dependency exemption deduction for his daughter, and various

Schedule A itemized deductions.    Further, petitioner argues that

he did not understate his 1983 Federal income tax and is not

liable for the additions to tax under sections 6651(a)(1),

6653(a), 6654(a) and 6661(a).

     Respondent contends that petitioner failed to file the

Federal return.   Respondent now concedes that petitioner was

married in 1983 and that only one-half of the income earned by

him is taxable to him in accordance with the community property

laws of California.   Further, respondent contends that petitioner

has not proven entitlement to any Schedule A itemized deductions

nor the exemption deduction for his daughter, and that petitioner

is liable for the additions to tax under sections 6651(a)(1),

6653(a), 6654(a), and 6661(a).



     4
      (...continued)
taxes, additions to tax, and interest for the taxable years 1979,
1980, and 1981.
                                - 7 -


Preliminary Matters

     Respondent has made a general objection to petitioner's

brief.    At the close of trial, we directed the parties to file

briefs.    Rule 151(e) addresses the form and content of briefs and

directs that all briefs shall contain certain information.    Rule

151(e)(3) directs that all briefs shall contain the following:

     Proposed findings of fact (in the opening brief or
     briefs), based on the evidence, in the form of numbered
     statements, each of which shall be complete and shall
     consist of a concise statement of essential fact and
     not a recital of testimony nor a discussion or argument
     relating to the evidence or the law. In each such
     numbered statement, there shall be inserted references
     to the pages of the transcript or the exhibits or other
     sources relied upon to support the statement. * * *

     Petitioner's opening brief fails to comply with Rule 151.

In particular, it fails to comply with paragraph (e)(3) thereof.

The section entitled "Petitioner's Proposed Findings of Fact"

contains incomplete statements and, with one exception, no

references to either the trial transcript, exhibits, or

stipulated facts.5


     5
        We note that petitioner's brief is defective in many
other ways. In particular, the contents and page numbers
described in the Table of Contents do not match the section
titles and page numbers in the body of the brief. In addition,
petitioner's brief does not include a statement of the nature of
the controversy and the tax involved as required by Rule
151(e)(2). Further, petitioner's brief also fails to include a
concise statement of the points on which petitioner relies as
required by Rule 151(e)(4). In addition, we note that
                                                   (continued...)
                                 - 8 -


      Petitioner's brief was of very little assistance to us.

Nevertheless, we shall not hold for respondent on that basis, but

have determined our findings of fact on the meager record before

us.

      We now turn to respondent's objections to some of

petitioner's exhibits.   Respondent objected to the following

exhibits on the basis of authenticity:    Petitioner's Exhibit 5,

the California return; Petitioner's Exhibit 6, Application for

Automatic Extension of Time to File the California return; and

Petitioner's Exhibit 8, Escrow Statement for the Gibraltar

property.   Finally, respondent objected to Petitioner's Exhibit 8

on the basis of hearsay and Petitioner's Exhibit 13, an Order

Holding the Franchise Tax Board in Civil Contempt, on the basis

of relevancy.6

      Proceedings in this Court are conducted in accordance with

the Federal Rules of Evidence.    Sec. 7453; Rule 143.   Evidence


      5
      (...continued)
petitioner's brief includes a section entitled "Petitioner's
Calculation of Proper Tax", which appears to be a premature
attempt at a Rule 155 computation.
      6
        Respondent's counsel also objected to the manner in which
she received Petitioner's Exhibits 5 through 11 because they were
sent to her via facsimile the morning of the trial. Although
petitioner violated the pretrial order by his failure to timely
provide respondent with these documents, respondent did stipulate
to them. Thus, we shall not exclude them because respondent's
receipt of them was delayed.
                                - 9 -


that will support a finding that the matter in question is what

the proponent claims is sufficient to authenticate that evidence.

Fed. R. Evid. Rule 901(b)(1).   With respect to Petitioner's

Exhibits 5 and 6, we believe respondent's objection goes to the

weight of the evidence rather than its admissibility, and we

overrule the objection.   As for Petitioner's Exhibit 8,

petitioner's testimony that he owns the Gibraltar property is

sufficient to provide the foundation necessary for this Court to

draw the inference that the evidence is what it is claimed to be.

Respondent's objection to these exhibits based on authenticity

is overruled.

     We also overrule respondent's hearsay objection to

Petitioner's Exhibit 8.   The hearsay is defined as "a statement,

other than one made by the declarant while testifying at the

trial or hearing, offered in evidence to prove the truth of the

matter asserted."   Fed. R. Evid. Rule 801(c).   Normally, hearsay

is excluded from evidence unless an exception to the hearsay rule

applies.   Snyder v. Commissioner, 93 T.C. 529, 532 (1989).    This

rule is designed to avoid the introduction of evidence that may

have the appearance of trustworthiness, but is not subject to the

test of cross-examination.   Anderson v. United States, 417 U.S.

211, 220 (1974); Snyder v. Commissioner, supra at 533.     Business

records are excepted from this exclusion, and we believe the
                                  - 10 -


escrow document is a business record.       See Fed. R. Evid. 803(6).

Therefore, we overrule respondent's hearsay objection.

       Finally, we turn to respondent's relevancy objection to

Petitioner's Exhibit 13.       Relevant evidence means evidence having

any tendency to make the existence of any fact that is of

consequence to the determination of the action more or less

probable than it would be without the evidence.       Fed. R. Evid.

401.       Petitioner's Exhibit 13 pertains to the efforts of the

California Franchise Tax Board to collect California income taxes

during petitioner's bankruptcy.       This document has no relevance

to petitioner's Federal income tax liability.       Accordingly, we

sustain respondent's objection.7




       7
        Petitioner argued that this exhibit was relevant to his
motion to dismiss based on petitioner's contention that the IRS
had already assessed a tax for the 1983 taxable year. We had
previously denied that motion, but advised petitioner that he
could renew the motion, if appropriate, at a later point during
the proceedings. Petitioner failed to do so. Since there is no
pending motion to dismiss, Petitioner's Exhibit 13 cannot be
relevant to such motion. Moreover, we fail to see any such
relevancy in any event.
                               - 11 -


Filing of the Federal Return and the Statute of Limitations

     Respondent's transcript of petitioner's 1983 account

indicates that no return or payments were received from

petitioner for the 1983 tax year.    The transcript did reflect

assessments totaling $520, which were explained by respondent's

witness as pertaining to a penalty for furnishing false

information regarding a Form W-4.    See section 6682.

     Petitioner contends that he timely mailed and filed the

Federal return and that the statute of limitations bars

assessment of the deficiency and additions to tax.    To support

this claim, petitioner presented a copy of an application for

automatic extension to file the California return and a copy of

the California return, both of which indicate that they were

signed sometime in 1984.    However, attached to the California

return was a copy of a form from the California Franchise Tax

Board, which indicates that the California return was not filed

until March 29, 1991.   Petitioner and Mrs. Roberts testified that

Mr. Henschel mailed the Federal return, although they did not

personally see him do so.    Based on this testimony, petitioner

contends that he mailed the Federal return, and, therefore, since

he mailed the Federal return to the IRS, he filed the Federal

return.   See Hotel Equities Corp. v. Commissioner, 546 F.2d 725

(7th Cir. 1976) affg. 65 T.C. 528 (1975).
                              - 12 -


     However, petitioner failed to present any documentary

evidence, such as a copy of the return or mailing receipt, which

would substantiate his claim that he mailed either the Federal

return or an application for extension to file the Federal

return.   If petitioner is contending that the 1983 Federal return

was mailed at the same time as the California return, it would

not have been mailed until 1991.    Moreover, given the conceded

items of income and the claimed deductions and exemptions based

on the California return, it is likely that a tax would have been

due and owing, inasmuch as petitioner had eliminated any

withholding of taxes from his wages.    However, petitioner

received no bills from respondent and made no payments to

respondent.   Accordingly, we find that petitioner did not file a

Federal return for 1983.   Thus, it follows that the period of

limitations does not bar assessment of the deficiency and

additions to tax for that year.    Sec. 6501(c)(3).

Burden of Proof

     Petitioner argues that the notice of deficiency should not

be accorded the normal presumption of correctness.     See Rule

142(a); Welch v. Helvering, 290 U.S. 111 (1933).      Specifically,

petitioner argues that the notice of deficiency is arbitrary and

unreasonable because he mailed the Federal return, he was married

during 1983, and the notice of deficiency attributed all of the
                                - 13 -


community income to him.    In addition, petitioner contends that

the proof of claim filed by the IRS in the bankruptcy proceeding

indicates the 1983 Federal income tax owed was $900, that the IRS

has a history and reputation for making mistakes in processing

returns, and that respondent did not offer the necessary

foundational information into evidence to support the notice of

deficiency.

       It is well established that, in the absence of exceptional

circumstances, the Court will not look behind a deficiency notice

to determine whether the Commissioner's agents followed proper

administrative procedures.    Human Engg. Inst. v. Commissioner, 61

T.C. 61, 66 (1973); see also Greenberg's Express, Inc. v.

Commissioner, 62 T.C. 324, 327 (1974).    Even in such exceptional

circumstances, the Court will generally not hold the deficiency

notice null and void to relieve the taxpayer of any tax

liability.     Greenberg's Express, Inc. v. Commissioner, supra at

328.

       With respect to petitioner's argument that the notice of

deficiency is arbitrary and unreasonable because it is erroneous,

we disagree.    Petitioner's testimony, standing alone, that he

signed the Federal return and gave it to Mr. Henschel to mail

does not establish that the Federal return was actually mailed.

Moreover, the fact that respondent allocated all of the community
                              - 14 -


income to petitioner, even though he was married in 1983, does

not make the deficiency notice arbitrary or unreasonable.    By

virtue of petitioner's failure to file the Federal return,

respondent issued a deficiency notice without information as to

petitioner's 1983 marital status.

     Petitioner appears to suggest that the proof of claim that

was filed in the bankruptcy court somehow limits the amount of

tax owed by petitioner, and, therefore, the deficiency notice is

arbitrary and unreasonable.   However, our review of the proof of

claim indicates that as of December 17, 1984, petitioner owed a

penalty of $520, interest of $153.49, and that no income tax had

been assessed.   The proof of claim is irrelevant to this

proceeding.

     Further, petitioner's argument that the alleged IRS

reputation for mistakes is a basis for determining that the

notice of deficiency is arbitrary and unreasonable is without

merit.

     Turning to petitioner's argument regarding the foundational

proof required of respondent, the U.S. Court of Appeals for the

Ninth Circuit, the court to which an appeal in this case would

lie, requires that respondent come forward with some substantive

evidence establishing a minimal evidentiary foundation for her

determination that the taxpayer received unreported income before
                                - 15 -


she may rely on the presumption that her determination is

correct.     Rapp v. Commissioner, 774 F.2d 932, 935 (9th Cir.

1985), affg. an order of this Court; Edwards v. Commissioner, 680

F.2d 1268, 1270-1271 (9th Cir. 1982), affg. per curiam an order

of this Court; Weimerskirch v. Commissioner, 596 F.2d 358, 360

(9th Cir. 1979), revg. 67 T.C. 672 (1977).     The facts in this

case support the deficiency notice.      Indeed, petitioner does not

dispute that he received wage income, interest income, and rental

income during 1983, and respondent's records indicate that

petitioner did not file the Federal return.     Thus, the minimal

evidentiary foundation for respondent's determination has been

conceded.8

Unreported Income

     In the deficiency notice, respondent determined that

petitioner received wages of $29,029 in 1983.     At trial,

petitioner testified that he was an engineer for the County of

Los Angeles, that he received wages from the County of Los

Angeles of $29,029, and that he received an undetermined amount

of rental income in 1983.    In addition, petitioner conceded that

he received interest income of $3,305.     In view of the record in


     8
        In this regard, petitioner's request on brief for
reasonable litigation costs will be denied as premature, and
because petitioner has not substantially prevailed. See Rules
231 and 232.
                                - 16 -


this case and respondent's concession, we hold that petitioner

had income of one-half of the wages and interest or $16,167.9

Filing Status

     In the notice of deficiency, respondent determined that

petitioner's filing status was single.   Petitioner contends on

brief that he is entitled to joint filing status for 1983.

     Section 1(a) provides that the filing status "married filing

joint" applies only to "every married individual * * * who makes

a single return jointly with his spouse under section 6013".

From this language, it is clear that a return must be filed in

order to be entitled to joint status.    Thompson v. Commissioner,

78 T.C. 558, 561 (1982); see Girard v. Commissioner, T.C. Memo.

1994-556.   If no return is filed as of the date the case is

submitted for decision, joint filing status ordinarily cannot be

claimed because no return would be in the record.    Phillips v.

Commissioner, 86 T.C. 433, 441 n.7 (1986), affd. in part and

revd. in part on other issues 851 F.2d 1492 (D.C. Cir. 1988); see

sec. 6013(a).

     We have previously found that petitioner did not file a

return for taxable year 1983.    In addition, since petitioner was



     9
        Because the record contains no information regarding the
unreported rental income, we make no determination with respect
to such income.
                              - 17 -


married at the end of 1983, and has not alleged or shown that he

was living apart from his wife during that year, he does not

qualify as the head of household for income tax purposes.

Therefore, the only filing status applicable to petitioner is

that of a married individual filing a separate return.    Secs.

1(d), 2(b), 6013(a).

Dependency Exemption Deduction

     Respondent determined that petitioner was entitled to one

exemption amount for himself during 1983.    However, petitioner

contends that he is also entitled to an additional exemption for

his daughter, Nicole.   Respondent conceded at trial that Nicole

resided with petitioner during 1983.

     Section 151(e) provides that a taxpayer is entitled to an

additional exemption for each dependent who (1) has gross income

less than the exemption amount or (2) is a child of the taxpayer

who is (a) either under 19 years of age or (b) a student.

Section 152(a) provides that a dependent includes a child of the

taxpayer who receives over half of his or her support from the

taxpayer.   During 1983, Nicole was 13 years of age, resided with

petitioner and Mrs. Roberts, and was unemployed.    However,

petitioner failed to prove that he provided over one half of

Nicole's support during the year at issue.    Because California is

a community property State, one half of the income earned by
                                - 18 -


petitioner is property of Mrs. Roberts.   Thus to the extent that

these funds were used to support Nicole, at best each spouse

contributed exactly one half of Nicole's support and not over one

half, as required by statute.    Jorg v. Commissioner, 52 T.C. 288

(1969); Ketcham v. Commissioner, T.C. Memo. 1982-637.

Accordingly, petitioner is not entitled to an exemption deduction

for Nicole.

Schedule A Itemized Deductions

     In the notice of deficiency, respondent determined that

petitioner was entitled to the zero bracket amount.   Petitioner

contends that he is entitled to Schedule A itemized deductions.

Specifically, petitioner contends that he is entitled to the

following itemized deductions that he claimed on the California

return:

              Expense                      Amount
          Medical/dental                    $150
          Real estate tax                    850
          General sales tax                1,300
          Auto license                       138
          Home mortgage interest           5,640
          Lot interest                     1,590
          Charitable contributions         2,900
          Union dues                         252
          Lawyer/accountant fees             300
          Small engine tools                 179

     Deductions are a matter of legislative grace, and the

taxpayer bears the burden of proving that he or she is entitled

to any deduction claimed.   New Colonial Ice Co. v. Helvering, 292
                              - 19 -


U.S. 435, 440 (1934).   This includes the burden of

substantiation.   Hradesky v. Commissioner, 65 T.C. 87, 90 (1975),

affd. per curiam 540 F.2d 821 (5th Cir. 1976).

     Section 6001 and the regulations promulgated thereunder

require taxpayers to maintain records sufficient to permit

verification of income and expenses.   As a general rule, if the

trial record provides sufficient evidence that the taxpayer has

incurred a deductible expense, but the taxpayer is unable to

adequately substantiate the amount of the deduction to which he

or she is otherwise entitled, the Court may estimate the amount

of such expense and allow the deduction to that extent.      Cohan v.

Commissioner, 39 F.2d 540, 543-544 (2d Cir. 1930).    However, in

order for the Court to estimate the amount of an expense, we must

have some basis upon which an estimate may be made.     Vanicek v.

Commissioner, 85 T.C. 731, 743 (1985).   Without such a basis, any

allowance would amount to unguided largesse.     Williams v. United

States, 245 F.2d 559, 560 (5th Cir. 1957).

     Petitioner testified that the Federal return mirrored the

California return.   In addition, petitioner and Mrs. Roberts

testified that the amounts claimed on the California return were

correct.   Except as noted below, petitioner introduced no

evidence such as bills, invoices, receipts, canceled checks, or

other evidence to substantiate the amounts claimed on the
                              - 20 -


California return or support his assertion that the California

return was correct when filed.    The absence of documentary

evidence was not explained by petitioner.    The fact that the

California return was signed under penalty of perjury is not

sufficient to substantiate the deductions claimed on it.    See

Wilkinson v. Commissioner, 71 T.C. 633, 639 (1979); Roberts v.

Commissioner, 62 T.C. 834, 836-837 (1974).    Thus, petitioner has

failed to substantiate the claimed deductions and, therefore, is

not entitled to the claimed itemized deductions.

     The record does contain a copy of a real estate tax bill for

the Inglewood property for the fiscal year ending June 30, 1980.

That document reflects a property tax assessment of $235.52.

Moreover, in 1983, taxpayers were entitled to a deduction for

general sales tax, which, in the absence of substantiation of

actual expenditure, could be claimed based on tables promulgated

by respondent based upon reported income.    Also in 1983, itemized

deductions necessarily had to exceed the zero bracket amount in

order to be beneficial taxwise.    The zero bracket amount for 1983

for a married taxpayer filing single was $1,700.    The allowance

of any amount based on the 1980 real estate tax assessment for

the Inglewood property and an allowance for sales taxes would not

come anywhere near $1,700.   Accordingly, we deny petitioner's
                                - 21 -


claim that he is entitled to Schedule A itemized deductions.

Section 6651(a)(1)

     Section 6651(a)(1) imposes an addition to tax for failure to

timely file a tax return unless it is shown that such failure was

due to reasonable cause and not willful neglect.      It is

petitioner's burden to show that he filed his return timely or

that reasonable cause existed for his failure to timely file his

return.   Rule 142(a); Welch v. Helvering, 290 U.S. 111 (1933);

Haden v. Commissioner, T.C. Memo. 1986-539; Carlin v.

Commissioner, T.C. Memo. 1981-694.       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.     Crocker v. Commissioner, 92 T.C.

899, 913 (1989).     To disprove "willful neglect", a taxpayer must

show that the late filing did not result from a "conscious,

intentional failure or reckless indifference."       United States v.

Boyle, 469 U.S. 241, 245 (1985).

     We have previously determined that petitioner failed to

timely file the Federal return.    Petitioner failed to present any

evidence that his failure to file was due to reasonable cause and

not willful neglect.    Accordingly, we sustain respondent on this

issue.

Section 6653(a)
                              - 22 -


     Section 6653(a) imposes an addition to tax equal to 5

percent of the underpayment of tax if any part of the

underpayment is due to negligence or intentional disregard of the

rules or regulations.   Section 6653(a)(2) imposes an addition to

tax in the amount of 50 percent of the interest due on the

portion of the underpayment attributable to negligence.

Negligence is defined as the lack of due care or failure to do

what a reasonable and ordinarily prudent person would do under

the circumstances.   Neely v. Commissioner, 85 T.C. 934, 937

(1985).   Respondent's determination that petitioner was negligent

is presumed correct, and petitioner bears the burden of proving

that he was not negligent.   Rule 142(a).

     Petitioner contends that he was not negligent because he

acknowledged receiving more gross income (i.e., the interest

income) than determined in the deficiency notice.10   However,

petitioner presented no books and records, receipts, bills,

canceled checks, or other documentation to support the claimed

deductions.   Moreover, we have previously concluded that

petitioner did not timely file the Federal return.    See Emmons v.




     10
        In his brief, petitioner argued that he was not liable
for the sec. 6662(a) penalty. However, sec. 6662(a) was not in
effect in 1983 and is not at issue in this case. Respondent
determined that sec. 6653(a) was applicable.
                               - 23 -


Commissioner, 92 T.C. 342, 350 (1989), affd. 898 F.2d 50 (5th

Cir. 1990).   Accordingly, we sustain respondent's determination.

Section 6654(a)

     Section 6654 imposes an addition to tax for failure to pay

estimated tax.    This addition to tax is mandatory unless a

taxpayer is able to qualify under the specific exceptions set

forth in section 6654(d).    Grosshandler v. Commissioner, 75 T.C.

1, 20-21 (1980).    Reasonable cause and lack of willful neglect

are not defenses to this addition to tax.    Petitioner had no

income taxes withheld from his wages and made no estimated tax

payments during 1983.    Moreover, petitioner presented no evidence

that he falls within any of the enumerated exceptions under

section 6654(d).    Accordingly, we sustain respondent's

determination.

Section 6661(a)

     Section 6661(a) provides a 10-percent addition to tax if

there is a substantial understatement of income tax.    An

understatement is "substantial" if it exceeds the greater of 10

percent of the tax required to be shown for the taxable year or

$5,000.   In view of respondent's concession that petitioner is

taxable on one-half of the income, the amount of the deficiency

herein will not exceed $5,000.    Accordingly, we do not sustain

respondent's determination on this issue.
                        - 24 -


To give effect to the foregoing,


                                       Decision will be

                                   entered under Rule 155.
