- 7 -
Commissioner, 91 T.C. 1049, 1056 (1988), affd. 926 F.2d 1470 (6th
Cir. 1991). The action or nonaction on the part of a taxpayer
that constitutes sufficient grounds to apply Rule 123(a) in
proceedings before us is a matter within this Court's discretion.
Id.
Petitioner's failure to proceed with prosecution of his
case, despite the Court's warning in its notice setting this case
for trial, its pretrial order, and the Order to Show Cause dated
May 15, 1998, constitutes sufficient grounds for the entry of a
default judgment against him. Accordingly, we shall sustain
respondent's determinations as to the deficiencies and the
additions to tax pursuant to sections 6651(a)(1) and 6654 on the
ground that petitioner either defaulted or simply failed to carry
his burden of proof.2 See, e.g., Smith v. Commissioner, supra at
1052.
Respondent also determined that petitioner is liable for an
addition to tax for fraudulent failure to file for 1991 and the
fraud penalty for 1992 and 1993. Entry of a default decision as
to the addition to tax for fraud and the fraud penalty is
appropriate if the pleadings set forth sufficient facts which
2 We note that, among other things, respondent determined
the following: (1) Petitioner is entitled to $97,710.12 for cost
of goods sold in 1991; (2) petitioner is entitled to an
additional $19,881.06 and $1,041.16 for cost of goods sold in
1992 and 1993, respectively; and (3) petitioner is entitled to
deduct $11,700, $22,360, and $22,360 for subcontract and employee
expenses in 1991, 1992, and 1993, respectively.
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