Opinion
6561-21S
09-14-2022
RAMAN BENJAMIN & TAMARA TOMA, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER OF DISMISSAL AND DECISION
Joseph W. Nega, Judge
On August 11, 2022, respondent filed a Motion to Dismiss for Failure to Properly Prosecute (respondent's motion). We find that petitioners failed to properly prosecute this 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 and, 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 4, 2022, this case was previously set for trial on September 6, 2022, at the Fresno, California, trial session. 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 case for trial was a Standing Pretrial Order for Small Case, which set forth the steps required of the parties in preparation for trial or other resolution. The Standing Pretrial Order directed petitioners, 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 this Order, the Judge may dismiss your case and enter a Decision against you." The copies of the notice setting case for trial and Standing Pretrial Order mailed to petitioners at the address listed on the Petition were not returned as undeliverable.
On February 8, 2021, respondent issued to petitioners a notice of deficiency, determining a deficiency of $7,462 for the 2017 taxable year. On May 10, 2021, petitioners filed a Petition with this Court.
On August 11, 2022, respondent filed respondent's motion to dismiss. Respondent represents that seven separate attempts were made to contact petitioners' counsel, 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 petitioners to file a response to respondent's motion to dismiss on or before August 29, 2022, and set the motion for hearing during the Court's September 6, 2022, trial session. To date, no response has been received from or on behalf of petitioners.
On September 6, 2022, this case was called and recalled from the calendar during the Court's trial session. There was no appearance by or on behalf of petitioners. 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); Edelson v. Commissioner, 829 F.2d 828, 831 (9th Cir. 1987), aff'g, T.C. Memo. 1986-223. 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); see also Brooks v. Commissioner, 82 T.C. 413, 429-30 (1984), aff'd without published opinion, 772 F.2d 910 (9th Cir. 1985).
Petitioners have failed to properly prosecute this case. Petitioners did not appear for trial on September 6, 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 them. Petitioners have 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, petitioners failed to file a pretrial memorandum as directed by the Standing Pretrial Order. Accordingly, we conclude that it is appropriate to dismiss petitioners' 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). Petitioners have failed to prosecute this case and have not carried their burden of proof with respect to the deficiency determined by respondent. See Rule 123(b). We thus conclude that respondent's deficiency determination is entitled to a presumption of correctness, which petitioners have failed to rebut.
The deficiency at issue relates to disallowed itemized deductions and thus does not implicate unreported income. Cf. Banister v. Commissioner, T.C. Memo. 2008-201, 2008 WL 3925877, at *1 ("In unreported income cases, however, the presumption of correctness does not attach unless the Commissioner first establishes a minimal evidentiary foundation for the deficiency."), aff'd, 418 Fed.Appx. 637 (9th Cir. 2011).
In respondent's motion to dismiss, respondent conceded the section 6662(a) penalty determined against petitioners.
Upon due consideration and for cause more fully appearing in the transcript of the proceedings, it is
ORDERED that respondent's Motion to Dismiss for Failure to Properly Prosecute, filed August 11, 2022, is granted, and this case is dismissed for lack of prosecution. It is further
ORDERED AND DECIDED that there is a deficiency in Federal income tax due from petitioners in the amount of $7,462 for the 2017 taxable year.