Opinion
7852-19
08-08-2022
DANIEL FRANCIS SERGILE, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER OF DISMISSAL AND DECISION
Albert G. Lauber Judge
Petitioner failed to file a Federal income tax return for 2016. On the basis of third-party reports the IRS prepared a substitute for return (SFR) and issued petitioner a notice of deficiency based on the SFR. That notice determined a deficiency of $27,298 and additions to tax for failure to file ($1,296) and failure to pay ($749). The deficiency results from the IRS's determination that petitioner had received unreported income.
On June 10, 2021, respondent filed a status report representing that the parties had reached a settlement under which the IRS would afford petitioner the benefit of joint filing and resolve the case by accepting a Form 1040, U.S. Individual Income Tax Return, jointly submitted for 2016 by petitioner and his wife. Respondent's counsel represents that, under this settlement, there would be a deficiency of $51,234 (calculated before subtracting a prepayment credit of $42,762), a late-filing addition to tax of $1,906, and a failure-to-pay addition to tax of $2,118. These figures are higher than those in the notice of deficiency because the joint return, which formed the basis for the settlement, also included the income received by petitioner's wife.
Respondent's counsel sent petitioner draft decision documents reflecting these computations, but petitioner declined to sign them. Respondent represents that petitioner declines to sign decision documents because his wife, who was also issued a notice of deficiency for 2016, is not a party to this case. Despite numerous orders directing the submission of executed decision documents, respondent has been unable to submit them because petitioner has declined to sign them. By Order served December 22, 2021, we advised the parties that, if no decision documents were submitted by January 24, 2022, we would set the case for trial. The parties did not submit decision documents by that date or subsequently. We thus calendared the case on the Court's June 13, 2022, remote trial session.
When the case was called from the calendar for the Court's June 13, 2022, remote trial session, there was no appearance by or on behalf of petitioner. On June 17, 2022, respondent filed a Motion to Dismiss for Failure to Properly Prosecute. Respondent argued that this case should be dismissed because petitioner failed to appear for trial and has not diligently prosecuted his case. See Tax Court Rule 123(b).
On June 27, 2022, we advised petitioner that, if he wished to accept the settlement that the IRS offered him, he needed to execute the decision documents, return them to respondent's counsel, and inform the Court that he had done so by July 22, 2022. We explained that, if he signed the proposed decision documents and paid the agreed-upon joint liability for 2016 (plus interest thereon and less his prepayment credit), neither he nor his wife would have any remaining liability for 2016. If he declined to sign the decision documents, we indicated that we would dismiss his case for lack of prosecution and enter a decision that reflects his liability as determined in the notice of deficiency. In all probability, the IRS would then be compelled to take further collection action for 2016 against his wife.
Petitioner did not file the signed decision documents or anything else with our Court by July 22, 2022, or subsequently. The standing pre-trial order in this case informed petitioner of his obligation to cooperate with respondent in preparing this case for trial or other disposition. Rule 123(b) of the Tax Court Rules provides that, "[f]or failure of a petitioner properly to prosecute or to comply with these Rules or any order of the Court, . . . the Court may dismiss a case at any time and enter a decision against the petitioner." Petitioner has not communicated with respondent's counsel or this Court and did not appear for trial. In consideration of the foregoing, it is
ORDERED the respondent's Motion to Dismiss for Failure to Properly Prosecute, filed June 17, 2022, is granted, and this case is dismissed. It is further
ORDERED and DECIDED that there is a deficiency in income tax due from petitioner for the taxable year 2016 in the amount of $27,298;
That there is an addition to tax for failure to file under the provisions of I.R.C. § 6651(a)(1) due from petitioner for the taxable year 2016 in the amount of $1,296; and
That there is an addition to tax for failure to pay under the provisions of I.R.C. § 6651(a)(1) due from petitioner for the taxable year 2016 in the amount of $749.