T.C. Memo. 1996-551

UNITED STATES TAX COURT

CHARLES TESLOVICH, Petitioner v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 7586-95. Filed December 19, 1996.

Charles Teslovich, pro se.

Frank A. Falvo, for respondent.

MEMORANDUM FINDINGS OF FACT AND OPINION

FOLEY, Judge: By notice dated April 10, 1995, respondent

determined deficiencies in and additions to petitioner's Federal

income taxes as follows:
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 Additions to Tax 

Year Deficiency Sec. 6651(a)(1) Sec. 6654 

1988 $5,621 $1,405 $359

1989 35,648 8,912 2,413

1990 5,774 1,444 380

1991 4,421 1,105 254

1992 3,765 941 165

1993 4,552 -- --

All section references are to the Internal Revenue Code in

effect for the years in issue, and all Rule references are to the

Tax Court Rules of Practice and Procedure.

Respondent has conceded that there are no deficiencies and

additions to tax for 1988, 1990, 1991, 1992, and 1993. As a

result, the issues for decision are as follows:

1. Whether petitioner failed to report $104,278 of income

in 1989. We hold that he did.

2. Whether petitioner, pursuant to section 6651(a)(1), is

liable for an addition to tax for failure to file a timely

Federal income tax return. We hold that he is liable.

3. Whether petitioner, pursuant to section 6654, is liable

for an addition to tax for failure to make estimated income tax

payments. We hold that he is liable.

FINDINGS OF FACT

Petitioner resided in Pittsburgh, Pennsylvania, at the time

his petition was filed. 

On July 26, 1996, respondent, pursuant to Rule 91(f),

submitted a motion to show cause why proposed facts in evidence
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should not be accepted as established. Respondent attached a

proposed First Stipulation of Facts to the motion. The Court,

pursuant to Rule 91(f), granted respondent's motion and issued an

order requiring petitioner, on or before August 9, 1996, to show

cause why the facts and evidence set forth in the stipulation

should not be accepted as established for purposes of this case.

Petitioner failed to comply with the order. As a result, by

order dated September 4, 1996, the Court deemed the facts

admitted for purposes of this case. 

Petitioner maintained brokerage accounts at BC Financial

Corp. and Habersheir Securities, Inc. During 1989, petitioner

received $104,147 in proceeds from the sale of stock held in

these accounts. During this same period, petitioner received

interest income of $67 and $64 from New England Mutual Life

Insurance Co. and Dollar Bank, respectively. Petitioner did not

file a 1989 Federal income tax return. 

On April 10, 1995, respondent issued petitioner a notice of

deficiency in which she determined that petitioner was liable for

a deficiency of $35,648 for 1989. She also determined that

petitioner was liable for additions to tax for failure to file a

timely return and for failure to make estimated income tax

payments.
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OPINION

I. Unreported Income

Respondent's notice of deficiency is presumed to be correct,

and the taxpayer bears the burden of proving that it is

erroneous. Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115

(1933). Gross income includes all income from whatever source

derived. Sec. 61(a). Interest income and proceeds from the sale

of stock constitute gross income. Sec. 61(a); secs. 1.61-6(a);

1.61-7(a), Income Tax Regs. 

Respondent contends that petitioner failed to report $131 in

interest income and $104,147 in proceeds from the sale of stock. 

Petitioner contends that the Internal Revenue Service has

orchestrated a campaign of harassment and false allegations

against him. He, however, failed to present any evidence to

refute respondent's determination and, as a result, has failed to

carry his burden of proof relating to this issue. Accordingly,

we conclude that petitioner received $104,278 of unreported

income in 1989, and the deficiency determined by respondent is

sustained. 

II. Addition to Tax for Failure To File a Timely Return

Section 6651(a)(1) imposes an addition to tax for failure to

file a timely return, unless it is shown that such failure is due

to reasonable cause and not due to willful neglect. Petitioner

bears the burden of proving that his failure to file a timely
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return was due to reasonable cause and not willful neglect. Rule

142(a); Baldwin v. Commissioner, 84 T.C. 859, 870 (1985). 

Petitioner, however, did not dispute his liability for this

addition to tax. As a result, petitioner has failed to carry his

burden of proof and is liable for the addition to tax.

III. Addition to Tax for Failure To Make Estimated Tax Payments

Section 6654 imposes an addition to tax for failure to make

estimated income tax payments. Petitioner bears the burden of

proving that he paid estimated tax or that an exception applies. 

Rule 142(a); Grosshandler v. Commissioner, 75 T.C. 1, 20-21

(1980). Petitioner, however, did not dispute his liability for

this addition to tax. As a result, petitioner has failed to

carry his burden of proof and is liable for the addition to tax.

We have considered the other arguments made by petitioner

and respondent and found them to be either irrelevant or without

merit.

To reflect the foregoing,

Decision will be entered

under Rule 155.