Opinion
21296-21S
09-14-2022
MAHER NESSIM-HANNA & SHEREN NESSIM-HANNA, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER OF DISMISSAL AND DECISION
Joseph W. Nega, Judge
This deficiency case was calendared for trial at the session of the Court scheduled for September 6, 2022, in Fresno, California. On August 15, 2022, respondent filed a Motion to Dismiss for Failure to Properly Prosecute (motion to dismiss). 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. 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 set for trial on September 6, 2022, in Fresno, California. 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 of 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 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 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 petitioners at the address listed on the Petition were not returned as undeliverable.
On May 11, 2021, respondent issued to petitioners a notice of deficiency, determining a deficiency of $5,691 for taxable year 2019 and an accuracy-related penalty of $1,138.20, pursuant to section 6662(a). On June 11, 2021, petitioners timely filed a Petition with this Court.
Respondent represents that respondent's personnel made multiple unsuccessful attempts to contact petitioners. On June 22 and June 24, 2022, an appeals officer from the Internal Revenue Service (IRS) Independent Office of Appeals (Appeals) attempted to contact petitioners via phone. On June 28, 2022, the appeals officer sent petitioners a letter, to which petitioners did not respond. On July 13 and August 9, 2022, a paralegal for respondent's counsel attempted to contact petitioners via phone. On July 15, 2022, a paralegal for respondent's counsel sent petitioners a letter requesting that they work with Appeals, to which petitioners did not respond. On August 15, 2022, respondent filed the motion to dismiss.
By Order issued August 18, 2022, the Court directed petitioners to file a response to the motion to dismiss on or before August 31, 2022, and set the motion for hearing during the Court's 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). In the Petition, petitioners did not assert that respondent's determination of a deficiency is incorrect and instead requested relief from the determined section 6662(a) penalty. 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 a disallowed section 30D(a) plug-in electric drive motor vehicle credit 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 the motion to dismiss, respondent conceded the section 6662(a) penalty.
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 15, 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 petitioners' 2019 Federal income tax due in the amount of $5,691.