- 8 -
1989) (discussing standard for dismissal under rule 41(b) of the
Federal Rules of Civil Procedure, the model for Rule 123(b)).
Accordingly, for the reasons discussed above, we granted
respondent’s motion to dismiss for lack of prosecution and
sustained respondent’s determination as to the deficiencies.
With respect to the fraud penalties, we exercised our discretion
under Rule 149(a) to conduct a trial to afford respondent the
opportunity to present evidence to meet his burden of proof. See
Brooks v. Commissioner, 82 T.C. 413, 426 (1984), affd. without
published opinion 772 F.2d 910 (9th Cir. 1985); Ritchie v.
Commissioner, 72 T.C. 126, 128 (1979).
Fraud Penalties
In the case of a fraud penalty, where the taxpayer is absent
from trial without excuse, the Commissioner may meet his burden
of proving fraud by means of pleadings which set forth sufficient
facts to support a finding of fraud. Smith v. Commissioner, 91
T.C. 1049, 1058-1059 (1988), affd. 926 F.2d 1470 (6th Cir. 1991).
Respondent’s pleadings in his answer set forth the following
facts, which are deemed admitted.
During 1995 and 1996, petitioner owned and operated a
construction business, an antiques business, and commercial
rental property.
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