Opinion
4053-21S
03-23-2022
LEANNE TROVERO, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER OF DISMISSAL AND DECISION
Joseph W. Nega Judge.
This case was calendared for remote trial at the session of the Court scheduled to commence Monday, March 21, 2022, for cases in which Peoria, Illinois, was listed as the place of trial. On February 25, 2022, respondent filed a Motion to Dismiss for Failure to Properly Prosecute (motion to dismiss), therein requesting that the Court dismiss this case for failure to properly prosecute and enter a decision sustaining the deficiencies and accuracy-related penalties for petitioner's 2017 and 2018 taxable years as determined in the Notice of Deficiency dated October 23, 2020. We find that petitioner has failed to properly prosecute this case and therefore we will dismiss this case pursuant to Rule 123.
Unless otherwise indicated, all statutory references are to the Internal Revenue Code, Title 26 U.S.C., in effect at all relevant times, and all Rule references are to the Tax Court Rules of Practice and Procedure.
Background
By Notice served November 4, 2021, this case was set for remote trial on March 21, 2022. Served with the notice setting 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 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. . . .
The Standing Pretrial Notice 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 14 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 petitioner at the address listed in the petition were not returned as undeliverable.
During the period after this case was set for trial, respondent's counsel sent letters to petitioner on December 21, 2021, and February 1, 2022, to schedule a pretrial conference. Respondent's counsel also attempted to contact petitioner via telephone on February 18 and February 24, 2022, and left a voicemail each time. However, petitioner has not responded to respondent's counsel's several attempts at communication.
On February 25, 2022, respondent filed his motion to dismiss. By Order served March 1, 2022, the Court directed petitioner to file a response to respondent's motion to dismiss on or before March 15, 2022, and set the motion for hearing during the Court's March 21, 2022, remote trial session. The Judge's chambers attempted to contact petitioner via telephone on March 1, March 2, March 3, March 4, and March 7, 2022, and left a voicemail each time. To date, no response has been received from or on behalf of petitioner.
On March 21, 2022, this case was called from the calendar at the Court's remote 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.
Discussion
The Court may dismiss a case at any time and enter a decision against the taxpayer for failure properly to prosecute his case, failure to comply with the Rules of this Court or any order of the Court, or for any cause which the Court deems sufficient. Rule 123(b); Stearman v. Commissioner, 436 F.3d 533, 535-537 (5th Cir. 2006), aff'g T.C. Memo. 2005-39; Bauer v. Commissioner, 97 F.3d 45, 48-49 (4th Cir. 1996); Edelson v. Commissioner, 829 F.2d 828, 831 (9th Cir. 1987), aff'g T.C. Memo. 1986-223. In addition, the Court may dismiss a case for failure to properly prosecute if the taxpayer inexcusably fails to appear for trial and does not otherwise participate in the resolution of his claim. Rule 149(a); Tello v. Commissioner, 410 F.3d 743, 744 (5th Cir. 2005); Rollercade, Inc. v. Commissioner, 97 T.C. 113, 116-117 (1991).
Petitioner has failed to properly prosecute this case. Petitioner did not appear for trial on March 21, 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 has failed to comply with the Court's Order served March 1, 2022. Accordingly, we conclude that it is appropriate to dismiss petitioner's case for failure to properly prosecute.
In the Notice of Deficiency, respondent determined that petitioner was liable for accuracy-related penalties under section 6662(a) for the 2017 and 2018 taxable years. The Commissioner generally bears the burden of production with respect to a penalty where the taxpayer has contested it in her petition. See sec. 7491(c); Funk v. Commissioner, 123 T.C. 213, 216-218 (2004); Swain v. Commissioner, 118 T.C. 358, 363-365 (2002). To satisfy the burden, the Commissioner must offer sufficient evidence to indicate that it is appropriate to impose the penalty. Higbee v. Commissioner, 116 T.C. 438, 446 (2001). If the Commissioner satisfies his burden of production, the taxpayer bears the burden of proving it is inappropriate to impose the penalty because of reasonable cause, substantial authority, or a similar provision. Higbee v. Commissioner, 116 T.C. 438, 446-447 (2001); see also § 6664(c); Wheeler v. Commissioner, 127 T.C. 200, 206 (2006), aff'd, 521 F.3d 1289 (10th Cir. 2008).
The Commissioner's burden of production with respect to penalties includes showing compliance with the procedural requirements of section 6751(b). See Graev v. Commissioner, 149 T.C. 485, 492-493 (2017), supplementing and overruling in part, 147 T.C. 460 (2016); see also Chai v. Commissioner, 851 F.3d 190, 221 (2nd Cir. 2017), aff'g in part, rev'g in part, T.C. Memo. 2015-42. Respondent has met his burden of production with respect to section 6751(b)(1). Attached to respondent's motion to dismiss was a Civil Penalty Approval Form indicating supervisory approval was obtained on April 7, 2020, for the assertion of accuracy-related penalties due to substantial understatement of tax or, in the alternative, negligence, the same date respondent issued a Revenue Agent Report to petitioner asserting such penalties.
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 February 25, 2022, is granted and this case is dismissed for failure to properly prosecute. It is further
ORDERED AND DECIDED that there are deficiencies in income tax due from petitioner for the 2017 and 2018 taxable years in the amounts of $5,874.00 and $10,393.00, respectively. It is further
ORDERED AND DECIDED that there are accuracy-related penalties under section 6662(a) due from petitioner for the 2017 and 2018 taxable years in the amounts of $1,174.80 and $2,078.60, respectively.