THIRD CIRCUIT AFFIRMS DEFICIENCY DETERMINATIONS AND PENALTY.

Dr. Alvin S. Kanofsky appeals, pro se, the decision of the United States Tax Court sustaining the determination by the Commissioner of Internal Revenue ("Commissioner") of deficiencies related to his federal tax returns for the years 1996 through 1998. For the reasons that follow, we will affirm the judgment of the Tax Court.

In July 2004, Kanofsky appealed these determinations to the Tax Court. The matter proceeded to trial, and the Tax Court issued a decision in favor of the Commissioner with some computational adjustments. First, the Tax Court sustained the Commissioner's denial of the 1996 through 1998 business expense deductions, determining that the evidence was insufficient to establish that Kanofsky was engaged in a trade or business during that period. Second, the Tax Court issued modifications to the deficiency determinations for 1997 through 1999 in order to address and correct minor computational errors. Third, the Tax Court sustained the 1997 accuracy-related penalty but reduced its amount. Thus, the Tax Court determined deficiencies in income tax paid -- due to an increase in Kanofsky's taxable income -- for 1996, 1997, 1998, 1999, and 2000 in the amounts of $14,506, $10,109, $10,055, $716, and $2,970, respectively; and an accuracy-related penalty, under I.R.C. § 6662, due for 1997 in the amount of $431. Kanofsky filed a motion to vacate or revise the decision, which the Tax Court denied. Kanofsky's notice of appeal was timely filed.² In this appeal he claims that the Tax Court: (1) improperly denied business expense deductions for 1996-98;³ and (2) abused its discretion in excluding certain evidence offered by Kanofsky at trial.

In his brief, Kanofsky argues that he was "active in business in high technology consulting, real estate development, and corporate start-ups" and also "in owning a music club, a flea market, and for whistle blowing." Further, according to Kanofsky, "[d]uring the years 1996-2000 . . . [he] was further developing ideas for companies, creating companies, and expanding on earlier research projects and ideas, developing patents, and protecting the company interests with law suits, etc. as well as using his building for business purposes and improving the building, such as with extensive renovations and improvements to the exterior." The problem, however, is that he neither produced documentary evidence nor witnesses to corroborate any of these contentions. But even taking Kanofsky's testimony and arguments at face value does him no service as there was no contention that he held himself out as providing goods or services of any kind to anyone. In fact, most of Kanofsky's testimony and appellate filings describe not how he went about conducting his own business, but how others went about conducting theirs. He describes in detail, much of it incendiary and not worth reprinting, how he has been thwarted from conducting his business by numerous third parties in Lehigh Valley, Pennsylvania. These arguments do not advance his cause. Moreover, as the Tax Court also surmised, Kanofsky's 1996 through 1998 Schedule C reporting showing zero gross receipts -- but expenses which were greater than his only source of income, wages as a professor, for each year in question -- wholly supports a finding that he was not engaged in any trade or business during this period. Finally, Kanofsky argues that the Commissioner was inconsistent in that he ruled that Kanofsky was in business in 1999 and 2000, but not in business in 1996, 1997, and 1998, when he was engaged in essentially identical activity. We note that on this point, Kanofsky may simply be equating inconsistency with benevolence. It is plain from the transcript of the Tax Court's hearing that Kanofsky's 1999 and 2000 returns would in all likelihood have suffered a similar fate as his 1996 through 1998 returns if the Commissioner had sought to challenge them.

Therefore, the Tax Court did not err in upholding the Commissioner's disallowance of the business expense deductions.

For the foregoing reasons, we will affirm the Tax Court's judgment.

² The Tax Court's decision was entered on November 17, 2006, and Kanofsky's motion to vacate was filed on December 19, 2006. The record makes plain, however, that the motion to vacate was postmarked on December 18. Hence, the motion to vacate was timely filed, extending the time in which Kanofsky could file a timely appeal. See Rule 162, Tax Court Rules of Practice and Procedure; see also Fed. R. App. P. 13(a)(2). The Tax Court entered its decision resolving the motion to vacate on December 20, 2006, so Kanofsky had until March 20, 2007, to appeal. Kanofsky's notice of appeal was timely filed on March 16, 2007.

³ Kanofsky's appeal of the tax court's deficiency determinations is somewhat circumscribed as his brief seeks only the reduction of deficiencies in 1996 through 1998 to amounts comparable to those allowed by the Commissioner in 1999 and 2000 where some, but not all, of his deductions were permitted. For its part, the Tax Court noted that Kanofsky's "evidence of business use for his three properties is no more convincing for 1999 and 2000 than it is for 1996-98"; however, the Commissioner did not disavow its previous decision not to challenge the 1999 and 2000 deductions at trial.