                       T.C. Memo. 2001-225



                     UNITED STATES TAX COURT



              ESTATE OF MICHAEL J. THOMAS, DECEASED,
             HELEN Z. THOMAS, EXECUTOR, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent


     Docket No. 15734-99.                    Filed August 15, 2001.


     William J. Abraham, for petitioner.

     John J. Boyle, for respondent.



                       MEMORANDUM OPINION


     COUVILLION, Special Trial Judge:    Respondent determined that

the estate was liable for the addition to tax under section

6651(a)(1), in the amount of $3,591, for failure to file its

Federal estate tax return timely.1    Based upon the estate tax



     1
          Unless otherwise indicated, all section references are
to the Internal Revenue Code.
                              - 2 -


return that was filed and the estate taxes shown on the return,

respondent assessed additions to tax under section 6651(a)(1) and

(2) in the respective amounts of $24,952.02 and $27,726.69.

Those amounts were paid by the estate, as to which an application

for refund was filed with respondent and subsequently denied.

Thereafter, respondent proposed a deficiency in estate tax in the

amount of $14,363 and an addition to tax thereon under section

6651(a)(1) in the amount of $3,591.   The estate agreed to

assessment of the $14,363 estate tax deficiency but did not agree

to assessment of the $3,591 addition to tax, whereupon respondent

issued the notice of deficiency for the addition to tax.     In the

petition, the estate challenges the section 6651(a)(1) addition

to tax of $3,591 and claims an overpayment for the previously

paid $24,952.02 and $27,726.69 additions to tax under section

6651(a)(1) and (2).

     The issue for decision is whether the estate is liable for

the additions to tax under section 6651(a)(1) and (2) for failure

to file its Federal estate tax return timely and failure to pay

the amount shown on the return, respectively.   The Court's

analysis of this issue includes the estate's claim to the refund

for overpayment of the previously assessed and paid additions to

tax under section 6651(a)(1) and (2).   See Judge v. Commissioner,

88 T.C. 1175 (1987).
                                - 3 -


     Some of the facts were stipulated, and those facts, with the

annexed exhibits, are so found and are incorporated herein by

reference.   At the time the petition was filed, the legal

residence of the executrix, Helen Z. Thomas, was Marietta, Ohio.

     The decedent, Michael J. Thomas (decedent), died testate in

Marietta, Ohio, on February 24, 1986.    On May 6, 1986, decedent's

will was admitted to probate in the Probate Court of Washington

County, Ohio (probate court), and the probate court issued

letters of authority appointing Helen Z. Thomas, who was

decedent's wife (the executrix), as the executrix to administer

decedent's estate.   Soon thereafter, the executrix engaged an

attorney, Robert Ellis (Mr. Ellis), to represent and assist her

in the administration of decedent's estate.   The due date for

filing the Federal estate tax return for its estate was November

24, 1986.    This date passed with neither an estate tax return nor

an application for an extension of the due date being filed by

the executrix on behalf of the estate.

     On January 6, 1987, the executrix filed with the probate

court an Inventory and Appraisal valuing decedent's estate at

$600,147.33, which consisted of $218,618.73 in intangible

personal property, $381,528.60 in real property, and four other

assets for which no values were listed.   The assets listed as

undetermined in value were:   (1) 150 shares of H.R.M., Inc., (2)

182 shares of Thomas, Inc., (3) 52 shares of Uncle Henry's, Inc.,
                              - 4 -


and (4) an interest in the Thomas Trust.   On each of the

following subsequent dates, the executrix filed a partial

Fiduciary's Account with the probate court listing the value of

assets remaining in decedent's estate:


             Date             Total Value of Assets

         Apr. 24, 1987            $799,259.53
         June 23, 1988             710,540.77
         Sept. 19, 1989            795,320.25
         Jan. 31, 1991              52,668.00
         Apr. 8, 1992               34,569.31


In each partial account filed with the probate court, the above-

listed assets of undetermined value were again listed as of

unknown value and apparently not included in the total value of

assets reported.2

     On July 26, 1991, the estate filed a suit against decedent's

brother, Joseph J. "Fuzzy" Thomas (Mr. Thomas), and another

individual3 in the Court of Common Pleas of Washington County,


     2
          On Jan. 31, 1991, the executrix filed a Report of Newly
Discovered Assets with the probate court, adding to the value of
decedent's estate numerous shares of various stocks whose value
totaled $180,342.89. Also, the partial Fiduciary's account filed
on Jan. 31, 1991, reflected a distribution of 182 shares of
Thomas, Inc. stock of unknown value and reflected the value of
150 shares of H.R.M., Inc., as zero rather than unknown. The
April 8, 1992 account reflected 150 shares of H.R.M., Inc., at
zero value and 52 shares of Uncle Henry's, Inc., and an interest
in the Thomas Trust of unknown value.
     3
          The other defendant in the suit was Lester W. Bigley,
who claimed that he had purchased certain real estate from the
                                                   (continued...)
                               - 5 -


Ohio (common pleas court), seeking the appointment of a trustee

for the Thomas Trust, a determination of the assets held by the

Thomas Trust, and a distribution of the trust assets to the

remaining beneficiaries thereof.   The Thomas Trust had been

established in March 1948 by decedent, his brother Mr. Thomas,

and their father as donors.   These three donors were also

designated as equal income beneficiaries of the Thomas Trust.

Decedent, during his lifetime, served as the trustee of the

Thomas Trust managing the assets and income thereof.   The father

predeceased both his sons.

     Apparently, upon decedent's death, the Thomas Trust was left

without a trustee, and there was some dispute among family

members as to the nature and value of assets that were owned by

the trust.   Also disputed was whether or not the Thomas Trust was

to terminate upon the death of decedent, and, if so, whether any

of the assets thereof should be distributed to decedent's estate,

or whether all were to be distributed to Mr. Thomas.   The stated

primary purpose of the suit was to have the common pleas court

resolve these issues.




     3
      (...continued)
Thomas Trust prior to decedent's death. The parties eventually
agreed that Mr. Bigley had purchased the subject real property
and was entitled to a deed for the same. This issue constituted
only one issue in the suit, and Mr. Bigley was dismissed from the
suit upon delivery of a deed for the subject property.
                               - 6 -


     On August 31, 1993, Attorney Michele Hilden Willard was

appointed by the common pleas court as trustee of the Thomas

Trust.   On October 5, 1993, the common pleas court entered a

pretrial order (agreed to by the parties), which decreed that the

Thomas Trust terminated upon the death of decedent and that

defendant Lester W. Bigley was entitled to a deed to the real

property that he had purchased from the Thomas Trust prior to

decedent's death.   Additionally, the common pleas court ordered

the trustee to file an inventory of the trust assets, to which

each party would have the right to file an objection.

     The trustee filed an inventory of Thomas Trust assets with

the common pleas court on October 28, 1993.   Both parties,

decedent's estate and Mr. Thomas, filed objections, and hearings

were held on December 10 and 14.   On December 21, 1993, the

common pleas court entered an order directing that all assets of

the Thomas Trust in excess of $27,500 should be distributed

equally to its two remaining beneficiaries; i.e., decedent's

estate and Mr. Thomas.

     On November 18, 1994, the common pleas court entered a

Judgment Entry of Dismissal with Prejudice, ordering that:     (1)

150 shares of Thomas, Inc. stock be distributed equally to

decedent's estate and Mr. Thomas, (2) remaining parcels of real

estate be distributed to Mr. Thomas, and (3) all remaining cash

and cash equivalents minus the trustee's fee and a $1,000
                               - 7 -


contingency fund (a net of approximately $15,840.14) be

distributed equally to decedent's estate and Mr. Thomas.   On

March 13, 1995, the trustee for the Thomas Trust submitted a

final accounting, and on March 17, 1995, the common pleas court

approved the accounting and discharged the trustee.

     On October 12, 1995, the executrix filed a final Fiduciary's

Account with the probate court reporting that all assets of

decedent's estate had been distributed and disbursed.   On March

26, 1996, the executrix filed an amended final Fiduciary's

Account that reported minor differences in a few dollar amounts

but still reflected distribution and disbursement of all assets.

Both final accounts reflected an unknown value for the following

assets:   (1) 75 shares of Thomas, Inc. common stock, (2) 26

shares of Uncle Henry's, Inc., to Thomas Trust A, (3) 26 shares

of Uncle Henry's, Inc., to Thomas Trust B, (4) 37 shares of

Thomas, Inc. common stock to Thomas Trust A, and (5) 38 shares of

Thomas, Inc. common stock to Thomas Trust B.   On April 30, 1996,

the probate court closed the estate and discharged the executrix.

     The estate filed a Form 706, United States Estate Tax Return

(estate tax return), on February 7, 1997, more than 10 years

after the due date thereof.   The estate tax return reported a

gross estate of $2,047,294.06, a taxable estate of $863,470.06,

and an estate tax liability of $110,906.76, all of which was

remitted with the filing of the estate tax return.    On the estate
                                 - 8 -


tax return, the reported value of the estate's interest in the

Thomas Trust was $202,167.60, consisting of real property and 75

shares of Thomas, Inc. stock less certain liabilities.

     Neither party challenges the amount of the estate tax.    As

noted earlier, the sole issue is the estate's contention that the

additions to tax under section 6651(a)(1) and (2) are not

applicable, not only as to the section 6651(a)(1) addition to tax

determined in the notice of deficiency, but also as to the

section 6651(a)(1) and (2) amounts that were previously paid by

the estate as to which a claim for refund was denied by

respondent.

     The addition to tax imposed under each paragraph of section

6651(a) applies "unless it is shown that such failure is due to

reasonable cause and not due to willful neglect."    The burden is

on the taxpayer to prove that the failure is due to reasonable

cause and not willful neglect.     United States v. Boyle, 469 U.S.

241, 245 (1985); Davis v. Commissioner, 81 T.C. 806, 820 (1983),

affd. without published opinion 767 F.2d 931 (9th Cir. 1985);

Estate of Newton v. Commissioner, T.C. Memo. 1990-208.    This is a

"heavy burden".   United States v. Boyle, supra at 245.

     In order to establish reasonable cause, a taxpayer must show

the exercise of ordinary business care and prudence and the

inability to file the return or pay the tax within the prescribed

time.   Sec. 301.6651-1(c)(1), Proced. & Admin. Regs.   In order to
                                   - 9 -


disprove willful neglect, a taxpayer must prove that the late

filing did not result from a "conscious, intentional failure or

reckless indifference."       United States v. Boyle, supra at 245-

246.       A conscious or intentional failure exists when the taxpayer

was aware of the duty to file the return within the due date but

failed to file the return under circumstances that do not justify

such failure.       Reckless indifference is established when the

taxpayer was aware of the duty to file on time but disregarded a

known or obvious risk that the return might not be filed within

the due date.       Estate of Campbell v. Commissioner, T.C. Memo.

1991-615.

       The due date of the estate's Federal estate tax return was

November 24, 1986, 9 months after the date of decedent's death.

Sec. 6075(a).       The estate failed to apply for an extension of the

due date to either file the return or pay the tax.4      The parties


       4
          The time for filing the estate tax return may be
extended but normally for not more than 6 months, so the return
will be due not more than 15 months following the date of a
decedent's death. Sec. 6081(a); sec. 20.6081-1(a), Estate Tax
Regs. Moreover, the time for payment of the amount of estate tax
shown, or required to be shown, can be extended for up to 12
months or, in cases of reasonable cause, up to 10 years. Sec.
6161(a)(1) and (2). The Court notes that the standards of
reasonable cause for the failure to file, on the one hand, and
the failure to pay, on the other hand, are not identical. United
States v. Boyle, 469 U.S. 241 (1985), involved the failure to
file and did not directly involve the failure to pay. See Estate
of LaMeres v. Commissioner, 98 T.C. 294 (1992), where sec.
6651(a)(1) and (2) was addressed repeatedly. In the instant
case, the estate made no separate argument with respect to the
                                                   (continued...)
                              - 10 -


stipulated that decedent's estate tax return was filed on

February 7, 1997, more than 10 years after the due date of the

return.   The parties also agree that the amount of tax shown on

the return was remitted with the return.

     The estate admits that it failed to file the estate tax

return timely and failed to pay the estate tax timely.    However,

the estate argues that such failures were due to reasonable cause

and not due to willful neglect.    The estate first argues that the

executrix was advised by her attorney and her certified public

accountant (CPA) that it would be improper to file an incomplete

estate tax return, and, thus, a return should not be filed until

a determination could be made as to the assets that were to be

included in decedent's estate.    Thus, the estate argues, the

executrix was advised to delay preparation and filing of the

estate tax return until the conclusion of the suit surrounding

the Thomas Trust.   The estate contends that the filing of the

estate tax return had to be delayed until the common pleas court

issued an order for the distribution of the assets in the Thomas




     4
      (...continued)
failure to pay. For example, the estate did not argue that it
failed to pay due to the lack of funds or liquid assets. Rather,
the estate's argument is that it was entitled to delay both the
filing of the return and payment of the tax for the same reason–-
the uncertainty of the estate's assets. Accordingly, the Court
treats both the failure to file and failure to pay issues
together.
                              - 11 -


Trust, so that the estate tax return would reflect an accurate

reporting of the assets of decedent's estate.

     The estate maintains that its inability to determine the

amount and value of Thomas Trust assets that may or may not have

been eventually distributed to the estate was beyond its control

and did not result from a deliberate or conscious choice on its

part, and, thus, the failure to file the return timely was not

willful.   Moreover, the estate argues that the executrix was an

elderly housewife, unsophisticated in the handling of estate tax

matters, and, thus, her reliance on the advice of her attorney

and her CPA constituted reasonable cause for the late filing of

the estate tax return.

     Conversely, respondent argues that the additions to tax were

properly assessed and determined, respectively, because the

executrix had a nondelegable duty to file a timely tax return and

to pay the tax, a duty which she failed to perform due to lack of

ordinary business care and prudence.   Respondent argues further

that lack of information, pending litigation, and the executrix's

reliance on the advice of her attorney and CPA did not establish

reasonable cause for those failures.   Respondent contends that

the estate should have filed a timely estate tax return and

timely paid the tax shown thereon based on the best information

available at the time of the due date of the return.   For reasons

set forth herein, the Court agrees with respondent that the

estate is liable for the additions to tax.
                              - 12 -


     The attorney representing decedent's estate, Mr. Ellis,

testified at trial that he was generally aware of the requirement

of filing an estate tax return, but that he did not advise the

executrix with respect to any such filing.    In fact, Mr. Ellis

could not recall having a conversation with the executrix

regarding the estate tax return; however, Mr. Ellis stated that,

if a conversation about taxes had occurred, "it would have been

early on and essentially what would have been said was Mr. McCoy

[the CPA] is taking care of the taxes."   Mr. Ellis testified

further that he did not hire the CPA to handle the tax matters of

decedent's estate, and that he had assumed the executrix had done

so since the CPA had prepared the family income tax returns for

several years.   Finally, Mr. Ellis stated that he never advised

the executrix that no estate tax return was required to be filed.

     The CPA testified that he was never directed to file or

asked about filing an estate tax return prior to 1991, which was

at least 4 years after the due date of the return.    The CPA

acknowledged that he was aware of the threshold estate tax filing

requirements for decedents dying in the year 1986.    However, when

questioned at trial as to why he failed to file a request for an

extension of the due date, the CPA replied:    "For one thing, when

we became involved with filing the estate return–-I believe it

was as late as 1991–-the return was well past due and there is

not much else we can do and, you know, the assets couldn't be

determined at that point."   He testified further that, in 1991,
                              - 13 -


he advised the executrix that the information needed to be

collected and a return needed to be filed.   Nevertheless, a

return was not filed until 1997.

     In general, a taxpayer may establish reasonable cause for

failing to file a timely return by establishing reasonable

reliance on the advice of an accountant or attorney even if it is

later established that such advice was erroneous or mistaken.

See United States v. Boyle, 469 U.S. at 250; Estate of Paxton v.

Commissioner, 86 T.C. 785, 820 (1986); Ketteman Trust v.

Commissioner, 86 T.C. 91, 108 (1986).   The rationale for this

rule is that a taxpayer is not expected to discern error in the

substantive advice of an accountant or attorney.     "Ordinary

business care and prudence" do not demand that the taxpayer

challenge the professional, seek a second opinion, or try to

monitor the provisions of the Internal Revenue Code himself.

United States v. Boyle, supra at 251.

     However, reliance on professional advice does not offer a

taxpayer wholesale protection against liability for the addition

to tax under section 6651(a)(1).   See United States v. Boyle,

supra.   As the Supreme Court has noted, Congress intended to

place upon the taxpayer the obligation of ascertaining and

meeting the statutory deadline for filing tax returns except in a

very narrow range of situations.   Id. at 249-250.    Accordingly,

an executor cannot avoid liability for failing to file a timely
                              - 14 -


estate tax return by turning the matter over to his attorney.

Id.   As the Court held:


      It requires no special training or effort to ascertain
      a deadline and make sure that it is met. The failure
      to make a timely filing of a tax return is not excused
      by the taxpayer's reliance on an agent, and such
      reliance is not "reasonable cause" for a late filing
      under section 6651(a)(1). * * *



Id. at 252.

      Here, the estate argues that the executrix failed to file

the estate tax return timely because she reasonably relied on the

advice of an attorney and a CPA and that, as a matter of law, the

return could not be filed until a determination was made as to

all assets of decedent's estate.   However, the estate failed to

establish that the executrix received any advice from Mr. Ellis

or Mr. McCoy about delaying the filing of the estate tax return,

either prior or subsequent to the due date for such return.5

      5
          The estate argues that the executrix also received and
relied upon similar advice from her daughter, Christina M. Thomas
(Tina Thomas), who is an attorney. However, Tina Thomas did not
become licensed to practice law until July 1986, 5 months after
the death of decedent and 4 months prior to the due date of the
estate tax return. Moreover, Tina Thomas's area of legal
specialty is energy law rather than decedents' estates or Federal
tax law. During law school, Tina Thomas did take a class in
Federal income tax law but did not take a class in Federal estate
and gift tax law. The Court finds that, during the years in
question, Tina Thomas was not a professional in the area of
Federal estate tax law upon whose advice regarding such matters
the executrix could have reasonably relied. See, e.g., Sanders
                                                   (continued...)
                               - 15 -


Since the estate has failed to prove that the executrix received

any such advice from any professional or expert adviser, the

Court need not reach the question of whether the executrix could

have reasonably relied on such advice.

     Moreover, while the executrix's lack of knowledge as to the

amount and value of Thomas Trust assets to eventually be

distributed to decedent's estate may have been beyond her

control, the Court does not believe that it was beyond her

control to ascertain the due date for filing the estate tax

return and to file timely an incomplete return, paying at least

that portion of the tax in a timely fashion and disclosing the

contingencies surrounding the assets in dispute.   The Court is

not convinced that complete and full knowledge of the amount and

value of Thomas Trust assets to be distributed to the estate was

essential to filing a timely estate tax return.

     The regulations require only that an estate tax return be

"as complete as possible".   Sec. 20.6081-1(c), Estate Tax Regs.

The regulations further permit supplemental information affecting

the tax liability to be filed after the expiration of the

extension period.   Id.   As a general matter, the unavailability



     5
      (...continued)
v. Commissioner, 21 T.C. 1012, 1019 (1954), affd. 225 F.2d 629
(10th Cir. 1955); Baclit v. Commissioner, T.C. Memo. 1989-576;
Estate of Meredith v. Commissioner, T.C. Memo. 1981-72.
                              - 16 -

of information is not reasonable cause for failing to file a

timely return.   See Crocker v. Commissioner, 92 T.C. 899, 913

(1989); Elec. & Neon, Inc. v. Commissioner, 56 T.C. 1324, 1342-

1344 (1971), affd. without published opinion 496 F.2d 876 (5th

Cir. 1974); Cook v. Commissioner, T.C. Memo. 1999-50; Barber v.

Commissioner, T.C. Memo. 1997-206.     Unless a taxpayer applies for

and obtains a timely extension of time to file, a taxpayer is

expected to file a timely return based on the best information

available and then file an amended return if necessary.       See

Estate of Vriniotis v. Commissioner, 79 T.C. 298, 311 (1982);

Cook v. Commissioner, supra; Barber v. Commissioner, supra.

     Moreover, pending litigation, even if the outcome affects

the estate's final tax liability, is not reasonable cause for

failing to file an estate tax return timely.     Estate of Mayer v.

Commissioner, 351 F.2d 617 (2d Cir. 1965), affg. 43 T.C. 403

(1964); Estate of Duttenhofer v. Commissioner, 49 T.C. 200

(1967), affd. per curiam 410 F.2d 302 (6th Cir. 1969); Estate of

Pridmore v. Commissioner, T.C. Memo. 1961-12; Sever v.

Commissioner, T.C. Memo. 1954-63.    In fact, this Court has

previously held that pending litigation affecting the fair market

value of a decedent's interest in property at the time of death

was not reasonable cause for untimely filing.     Porter v.

Commissioner, 49 T.C. 207, 226-227 (1967).     In Porter, the Court

held that the executor should have filed a timely estate tax
                               - 17 -

return by giving only tentative values pending the outcome of the

litigation.    In such situations, reasonable estimates are

permitted and are preferable to the failure to file the estate

tax return within the prescribed time.    Id.

     For decedents dying in the year 1986, the threshold

requirement for filing a Federal estate tax return was a gross

estate exceeding $500,000.    Sec. 6018(a)(1), (3).6   On January 6,

1987, approximately 6 weeks after the due date of the estate tax

return, the executrix filed an inventory with the probate court

that listed an aggregate value of assets in decedent's estate of

$600,147.33.    It is notable that the $600,147.33 value in this

inventory did not include the values of other listed assets: (1)

150 shares of H.R.M., Inc., (2) 182 shares of Thomas, Inc., (3)

52 shares of Uncle Henry's, Inc., and (4) an interest in the

Thomas Trust.    Rather, the values of these assets were listed as

"unknown".

     It is clear to this Court that, at some time prior to the

due date for filing the estate tax return, the executrix knew or

should have known that the value of decedent's gross estate


     6
          The estate makes assertions on brief that the value of
decedent's estate after taking into account marital deductions
would have fallen below the filing threshold. This argument
ignores the fact that the estate tax return filing requirement is
based on a gross estate figure rather than a taxable estate. The
marital deduction is taken into account only with respect to the
taxable estate. Secs. 2031, 2051, 2056.
                              - 18 -

exceeded $500,000, i.e., the filing threshold amount, even

without inclusion of the assets involved in the Thomas Trust

dispute.7   Therefore, the Court cannot accept the estate's

contention that the outcome of the common pleas court litigation

would have determined whether an estate tax return was required

to be filed.   On this record, it appears that a Federal estate

tax return would have been required to be filed even if

decedent's estate had received none of the assets of the Thomas

Trust involved in the litigation.   Thus, the outcome of the

common pleas court case would have had no effect on the necessity

for filing a return.8

     Moreover, when eventually filed, the estate tax return

reported a $2,047,294.06 gross estate at the date of decedent's

death.   The gross estate consisted of $557,180 in real estate,

$771,109.47 in stocks and bonds, $264,330.53 in mortgages, notes,



     7
          Indeed, just as the Supreme Court stated in United
States v. Boyle, 469 U.S. at 252, that it requires no special
training or effort to ascertain a deadline and make sure that it
is met, it requires no more special training nor effort to
ascertain the dollar value threshold for filing a return. In any
event, lack of knowledge that a return is required to be filed or
of the due date thereof does not constitute reasonable cause.
Cronin's Estate v. Commissioner, 164 F.2d 561, 566 (6th Cir.
1947), affg. on this issue 7 T.C. 1403, 1414 (1946).
     8
          The Court finds it also notable that the suit regarding
the Thomas Trust was not filed by the executrix until 4-1/2 years
after the due date of the return, and that the estate tax return
was not filed until 2 years following the final disposition of
the Thomas Trust case.
                              - 19 -

and cash, $38,058.49 in jointly owned property (real estate and

publicly traded stocks), and $416,615.57 in miscellaneous

property.   Listed as an item of miscellaneous property was

"Thomas Trust -- 50% Interest", which was valued at $202,167.60

on the date of decedent's death.    Compared to the remaining

assets included in decedent's estate, the interest in the Thomas

Trust would not have had a significant effect on the total value

of decedent's gross estate.   In fact, the interest in the Thomas

Trust consisted of only approximately 10 percent of the entire

value of decedent's gross estate.    Thus, a timely estate tax

return including all assets except the 50-percent interest in the

Thomas Trust would have been substantially correct.

     Regardless, therefore, of the dispute surrounding the assets

held in the Thomas Trust, the executrix should have filed a

timely Federal estate tax return with the best information

available at the time, disclosing in the return that a dispute

existed with respect to Thomas Trust assets and making an

estimate of the value of those assets.    At that time, the

executrix could have paid the tax shown to be due on that return.

Later, following the conclusion of the litigation, the executrix

could have filed an amended return, including in decedent's

estate the 50-percent interest in the Thomas Trust that was

decreed by the common pleas court and paying any additional tax
                                - 20 -

due as a result thereof.9   Moreover, the executrix could have

filed an application for a 6-month extension of the due date of

the estate tax return (as well as an extension to pay the tax),

allowing her additional time to compile information regarding the

assets of decedent's estate.

     Rather than following any such reasonable and prudent course

of action, the executrix made no apparent attempt to comply with

the estate tax return filing and estate tax payment requirements

of the Internal Revenue Code.    Instead, the executrix chose to

disregard these requirements until some 10 years after the due

date of the return, thus failing to discharge her nondelegable

duty.    See Estate of Geraci v. Commissioner, T.C. Memo. 1973-94,

affd. 502 F.2d 1148 (6th Cir. 1974).     Moreover, the executrix did

not appear at the trial of this case; therefore, the record is

devoid of her testimony regarding her knowledge or actions

surrounding the estate in the more than 10 years that followed

decedent's death.   "The rule is well established that the failure

of a party to introduce evidence within his possession, and which

if true, would be favorable to him, gives rise to the presumption

that if produced it would be unfavorable."     Wichita Terminal

Elevator Co. v. Commissioner, 6 T.C. 1158, 1165 (1946), affd. 162

F.2d 513 (10th Cir. 1947); see also Estate of Fox v.

     9
          If this procedure had been followed, it is obvious that
the bulk of the estate tax owed would have been paid on or before
the due date of the return.
                               - 21 -

Commissioner, T.C. Memo. 1995-30, affd. without published opinion

100 F.3d 945 (2d Cir. 1996).   Nevertheless, the evidence in the

record suggests a lackadaisical, if not indifferent, attitude on

the part of the executrix with respect to the preparation and

filing of the estate tax return and payment of estate taxes.

     The executrix in this case was not a naive, incapacitated,

elderly citizen but rather an experienced businesswoman who

operated a restaurant and night club into the early 1970s and

thereafter assisted a cousin in operating a dress shop.    There is

also evidence in the record to suggest that, as late as 1984,

1985, and 1986, the executrix assisted decedent in the operation

of a Schedule C business known as Club Continental.    Moreover,

the executrix was only 66 years of age at the time of her

husband's death.

     The executrix was charged with the duty of ascertaining the

due date for filing the estate tax return.   Additionally, as the

deadline for filing the estate tax return approached, ordinary
business care and prudence required that she utilize whatever

information had been gathered and prepared to that point to file

a timely return and to continue finalizing information for an

amended return at a later date, a procedure she followed on

numerous occasions with the probate court.   Her failure to take

these steps constituted willful neglect on her part.

     On this record, the Court finds that the estate failed to

prove that the failure to file a timely Federal estate tax return
                              - 22 -

and to pay timely the estate tax shown to be due was due to

reasonable cause and not to willful neglect.10    Thus, the Court

holds that the estate is liable for the additions to tax under

section 6651(a)(1) and (2) which were previously assessed and

paid and the amount determined by respondent in the notice of

deficiency.   Respondent's determination in the notice of

deficiency is sustained, and the estate is not entitled to a

refund of amounts previously assessed and paid.



                                         Decision will be entered

                                    for respondent.




     10
          To the extent not explicitly stated in this opinion,
the Court's application of the relevant law to the facts in this
case applies equally to the addition to tax under sec. 6651(a)(2)
and to the addition to tax under sec. 6651(a)(1).
