Opinion
11579-21
09-21-2022
TERRI Q. ALSTON, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER OF DISMISSAL AND DECISION
Joseph W. Nega Judge
This deficiency case was previously calendared for trial on September 19, 2022, at the Columbia, South Carolina trial session. On August 4, 2022, respondent filed a Motion to Dismiss for Failure to Properly Prosecute (motion to dismiss). We find that petitioner failed to properly prosecute her case and therefore this case shall be dismissed pursuant to Rule 123.
All Rule references are to the Tax Court Rules of Practice and Procedure. Unless otherwise indicated, all statutory references are to the Internal Revenue Code, Title 26 U.S.C, in effect for the year at issue.
I. Background
By Notice of Trial issued May 13, 2022, this case was previously set for trial on September 19, 2022, in Columbia, South Carolina. The Court's notice of that date warned: "Your failure to appear may result in dismissal of the case and entry of decision against you." That warning was based on Rule 123, which provides:
(a) Default: If any party has failed to plead or otherwise proceed as provided by these Rules or as required by the Court, then such party may be held in default by the Court either on motion of another party or on the initiative of the Court. Thereafter, the Court may enter a decision against the defaulting party, upon such terms and conditions as the Court may deem proper, or may impose such sanctions (see, e.g., Rule 104) as the Court may deem appropriate. . . .
(b) Dismissal: For failure of a petitioner to properly prosecute or to comply with these Rules or any order of the Court or for other cause which the Court deems sufficient, the Court may dismiss a case at any
time and enter a decision against the petitioner. . . .
Served with the notice setting this case for trial was a Standing Pretrial Order, which set forth the steps required of the parties in preparation for trial or other resolution. The Standing Pretrial Order directed petitioner, inter alia: (1) to communicate and cooperate with respondent's counsel regarding settlement or, if the case could not be settled, the preparation of a stipulation of facts; (2) to serve on respondent's counsel and file with the Court a pretrial memorandum no later than 21 days before the first day of the trial session; (3) unless otherwise excused, to appear at the calendar call; and (4) to be prepared to try the case during the trial session of the Court. The Standing Pretrial Order warned: "If you do not follow the provisions of this Order, the Judge may dismiss your case and enter a Decision against you." The copies of the Notice of Trial and Standing Pretrial Order mailed to petitioner at the address listed on the Petition were not returned as undeliverable.
On December 28, 2020, respondent issued to petitioner a notice of deficiency, determining a deficiency of $3,328 for the 2017 taxable year. The notice of deficiency made a determination to disallow $11,000 in Schedule C gross receipts/net profit reported by petitioner and made corresponding downward adjustments to petitioner's claimed Earned Income Tax Credit and Additional Child Tax Credit. On April 1, 2021, petitioner timely filed a Petition with this Court. In the Petition, petitioner stated, in relevant part, that she needed additional time to substantiate the income received and that her "bank account does not reflect this income," as she "was paid cash for these events."
On August 4, 2022, respondent filed the motion to dismiss. In the motion to dismiss, respondent represents that multiple separate attempts were made to contact petitioner, by letter and phone, both through respondent's counsel and through the Internal Revenue Service Independent Office of Appeals. None of these attempts received any response.
By Order issued August 12, 2022, the Court directed petitioner to file a response to the motion to dismiss on or before September 2, 2022, and set the motion for hearing during the Court's September 19, 2022, trial session. To date, no response has been received from or on behalf of petitioner.
On September 19, 2022, this case was called from the calendar during the Court's trial session. There was no appearance by or on behalf of petitioner. Counsel for respondent appeared and was heard on the motion to dismiss. Respondent's motion to dismiss was taken under advisement by the undersigned.
II. Discussion
The Court may dismiss a case at any time and enter a decision against the taxpayer for failure to properly prosecute his or her case, failure to comply with the Rules of the Court or any order of the Court, or for any cause which the Court deems sufficient. Rule 123(b); Bauer v. Commissioner, 97 F.3d 45, 48 (4th Cir. 1996). The Court may also dismiss a case for lack of prosecution if the taxpayer inexcusably fails to appear at trial and does not otherwise participate in the resolution of the taxpayer's case. Rule 149(a); Harper v. Commissioner, 99 T.C. 533, 540 (1992).
Petitioner has failed to properly prosecute this case. Petitioner did not appear for trial on September 19, 2022, despite being warned by the Notice of Trial and Standing Pretrial Order that failure to appear could result in dismissal of the case and entry of decision against her. Petitioner has failed to communicate and cooperate with respondent's counsel to prepare for trial or otherwise resolve this case as directed by the Standing Pretrial Order. Additionally, petitioner failed to file a pretrial memorandum as directed by the Standing Pretrial Order. Accordingly, we conclude that it is appropriate to dismiss petitioner's case for lack of prosecution.
In general, the Commissioner's determinations in a notice of deficiency are presumed correct, and the petitioner bears the burden of proving them erroneous by a preponderance of the evidence. Rule 142(a)(1); Welch v. Helvering, 290 U.S. 111, 115 (1933); Williams v. Commissioner, 999 F.2d 760, 763 (4th Cir. 1993), aff'g, T.C. Memo. 1992-153. In unreported income cases, the presumption of correctness does not attach unless the Commissioner first establishes a minimal evidentiary foundation for the deficiency. See Holland v. Commissioner, T.C. Memo. 2021-129, at *5, aff'd, 2022 WL 1619849 (4th Cir. May 23, 2022).
This case does not involve unreported income; instead, it involves reported income that has been disallowed by respondent. Accordingly, respondent's deficiency determination remains entitled to the presumption of correctness. By failing to produce evidence to the contrary, petitioner has failed to rebut that presumption. Upon due consideration and for cause more fully appearing in the transcript of the proceeding, it is
ORDERED that respondent's Motion to Dismiss for Failure to Properly Prosecute, filed August 4, 2022, is granted, and this case is hereby dismissed for failure to properly prosecute. It is further
ORDERED AND DECIDED that there is a deficiency in petitioner's 2017 Federal income tax in the amount of $3,328 due.