Dennis J. and Teresa Deneault - Page 2

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          agrees with and adopts the opinion of the Special Trial Judge,              
          which is set forth below.                                                   
                         OPINION OF THE SPECIAL TRIAL JUDGE                           
               PANUTHOS, Chief Special Trial Judge:  This matter is before            
          the Court on respondent's Motion for Judgment on the Pleadings,             
          filed May 15, 1997.   As explained in greater detail below, we              
          will grant respondent's motion.                                             
          Background                                                                  
               Respondent issued a notice of deficiency to petitioners                
          determining a deficiency in their Federal income tax for 1991 in            
          the amount of $61,304 and an addition to tax for fraud under                
          section 6663 in the amount of $45,978.  Petitioners invoked the             
          Court's jurisdiction by filing a timely (but imperfect) petition            
          for redetermination, followed by a proper amended petition.2                
               Respondent filed an answer to the amended petition,                    
          including therein specific allegations regarding the method of              
          income reconstruction that respondent relied upon in determining            
          the deficiency in this case, as well as specific allegations in             
          support of respondent's determination that petitioners' entire              
          underpayment of tax for 1991 is attributable to fraud.                      
          Petitioners failed to file a reply to respondent's answer.                  
          Consequently, respondent filed a motion pursuant to Rule 37(c)              


          2  At the time the imperfect petition was filed, petitioner                 
          Dennis J. Deneault was incarcerated at Eglin Air Force Base,                
          Florida, and petitioner Teresa Deneault resided in Florida.                 




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