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cooperate and to address the merits of respondent’s determination
throughout the pendency of this proceeding. At each step of the
litigation process, petitioner’s response to respondent’s or the
Court’s attempts to address the merits was to make collateral
attacks on the Court’s and respondent’s authority. Petitioner
alleged various conspiracies to defraud her, but she did not
advance evidence showing respondent’s determination was in error.
When respondent was finally able to obtain information about the
Forms 1099 (mostly from third-party sources), adjustments were
made reducing the deficiency determination. The reduced income
tax deficiencies, agreed to by petitioner, are attributable to
unreported income from rental properties and unreported income
from interest and dividends.
Discussion
A. Respondent’s Motion To Dismiss
Under Rule 123(b) the Court may dismiss a case and enter a
decision where a taxpayer fails properly to prosecute or to
comply with the Court’s Rules. We have concluded that, in
deciding whether to dismiss, we balance “rival consideration[s]
* * * [involving] the policy in favor of having cases heard on
their merits with the policy in favor of avoiding harassment to
the defending party arising from unjustifiable delay.” Freedson
v. Commissioner, 67 T.C. 931, 935 (1977), affd. 565 F.2d 954 (5th
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Last modified: May 25, 2011