T.C. Memo. 1996-356

UNITED STATES TAX COURT

PAUL M. KIRIN, Petitioner v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 9082-88. Filed August 6, 1996.

Larry Kars, for petitioner.

Cheryl B. Harris, for respondent.

MEMORANDUM OPINION

WRIGHT, Judge: This matter is before the Court on

respondent's motion for entry of decision in accordance with a

stipulation of settlement (the stipulation) filed October 11,

1994. We must decide whether the subject decision properly

reflects petitioner's entitlement to an investment tax credit. 
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1Unless otherwise indicated, all section references are to

the Internal Revenue Code in effect during the years at issue,

and all Rule references are to the Tax Court Rules of Practice

and Procedure.

Background

Petitioner resided in Novi, Michigan, when he filed the

petition. This case is part of respondent's tax shelter

litigation project entitled "Scheer". The Scheer litigation

project involves a partnership organized to purchase and market

video tapes. By notice of deficiency dated February 18, 1988,

respondent determined deficiencies in, additions to, and

increased interest on petitioner's Federal income tax as

follows:1

 Additions to Tax and Increased Interest 

Year Deficiency Sec. 6653(a)(1) Sec. 6653(a)(2) Sec. 6659 Sec. 6621(c) Sec.

6661

1981 $ 6,435 $322 

1 $1,844 2 ---

1982 11,245 562 

1 2,885 2 $407

1 50% of the interest due on the deficiency.

2 120% of the interest payable under sec. 6601.

In the stipulation, petitioner agreed to be bound by the

test case entitled Pinto v. Commissioner, docket No. 17407-86. 

This Court entered a decision in the Pinto case on January 18,

1995. The stipulation provides:

With respect to all adjustments in respondent's

notice of deficiency relating to the Scheer Project tax

shelter, more specifically, the limited partnership

entitled Richard II, Ltd., the parties stipulate to the

following terms of settlement:

1. THE ABOVE ADJUSTMENTS ARE THE ONLY ISSUES IN

THIS CASE WITH RESPECT TO ALL PARTIES;
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2. The above adjustments, as specified in the

preamble, shall be redetermined by application of the

same formula as that which resolved the same tax

shelter adjustments with respect to the following

taxpayers:

Names: Melvin and Barbara Pinto

Tax Court Docket No.: 17407-86

(hereafter the CONTROLLING CASE)

3. All issues involving the above adjustments

shall be resolved as if the petitioners in this case

were the same as the taxpayers in the CONTROLLING CASE;

* * *

5. A decision shall be submitted in this case

when the decision in the CONTROLLING CASE (whether

litigated or settled) becomes final under I.R.C. §

7481;

* * *

The parties agree to this STIPULATION OF SETTLEMENT.

Respondent filed a motion for entry of decision with this

Court on October 24, 1995. Attached as an exhibit to said motion

was a decision document (the Document) that respondent claims to

be in accordance with the stipulation. By Order dated November

7, 1995, the Court directed petitioner to show cause why

respondent's above-referenced motion should not be granted. 

Petitioner filed his response on December 15, 1995. He contends

that the notice of deficiency fails to account properly for an

investment tax credit. 

By Order dated April 16, 1996, the Court directed respondent

to address petitioner's above-referenced response. On June 10,
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1996, respondent filed her response. Respondent contends that

her calculations account for the investment tax credit sought by

petitioner.

Discussion

Petitioner argues that the decision document prepared by

respondent fails properly to reflect an investment tax credit. 

Respondent has satisfied the Court, however, that the decision

document properly reflects the particular adjustment sought by

petitioner. In light of petitioner's scant response to

respondent's motion for entry of decision, we agree with

respondent. The record indicates that respondent provided

petitioner with two proposed decision documents. Respondent

concedes that the first of these decision documents failed to

account for the credit sought by petitioner. The record

indicates, however, that the second decision document properly

accounts for the subject credit. 

Respondent requests that the Court impose against petitioner

and his counsel a penalty pursuant to section 6673(a)(1) and (2). 

In support of this request, respondent contends that petitioner

advanced arguments primarily for the purpose of delaying entry of

decision. In the exercise of our discretion, we shall not grant

respondent's request.

To reflect the foregoing, 

An appropriate order will be issued

granting respondent's motion for

entry of decision, and decision

will be entered accordingly.