Holly Ruocco - Page 5

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               resources.  As I mentioned to you on the telephone, if                 
               your claims prove to be frivolous, you should be aware                 
               of I.R.C. section 6673, which provides:                                
                         (a)(1) Procedures instituted primarily for                   
                    delay, etc.--Whenever it appears to the Tax Court                 
                              (1)(A) proceedings before it have been                  
                    instituted or maintained by the taxpayer primarily                
                    for delay,                                                        
                              (1)(B) the taxpayer’s position in such                  
                    proceeding is frivolous or groundless, or                         
                              (1)(C) the taxpayer unreasonably failed                 
                    to pursue available administrative remedies,                      
                    the Tax Court, in its decision, may require the                   
                    taxpayer to pay to the United States a penalty not                
                    in excess of $25,000.                                             
               (Emphasis added.)  We routinely pursue sanctions under                 
               this section in cases of non-cooperation, and we may do                
               so in your case as well.                                               
          (A copy of that letter was attached to respondent’s pending                 
          motion to dismiss.)                                                         
               On December 17, 2001, respondent filed a Motion to Show                
          Cause Why Proposed Facts in Evidence Should not be Accepted as              
          Established (motion to show cause).  Attached to respondent’s               
          motion to show cause was a proposed stipulation that, among other           
          things, set forth facts for 1996 and 1997 that included the                 
          following:  Petitioner was married to Storks; petitioner and                
          Storks resided in Arizona; and petitioner was licensed as a                 
          chiropractor by the State of Arizona.  Prior to 1996, petitioner            
          practiced her profession at Canyon State Chiropractic.  Prior to            

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