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that petitioner must pay respondent and the amount of
respondent’s costs under section 6673(a)(2) that petitioner’s
counsel, Noel W. Spaid, must pay respondent.
Background
This case was tried in 2001 over 2 days separated by more
than 5 months. In Edwards v. Commissioner, T.C. Memo. 2002-169,
we held petitioner had failed to report income in 1996, was not
entitled to various deductions claimed for 1996 and 1997, and was
liable for accuracy-related penalties under section 6662(a). We
also found petitioner had unreasonably failed to pursue
administrative remedies and had taken frivolous and groundless
positions and would be liable for a penalty under section
6673(a)(1) in an amount to be determined; we also found Ms. Spaid
had recklessly and knowingly made frivolous arguments on
petitioner’s behalf and that she would be required to pay, under
section 6673(a)(2), respondent’s excess costs, expenses, and
attorney’s fees. We deferred setting the penalty under section
6673(a)(1) and Ms. Spaid’s liability under section 6673(a)(2)
until the parties responded to our inquiries into respondent’s
excess costs attributable to the misconduct of petitioner and Ms.
Spaid. We ordered respondent to submit an affidavit of costs,
expenses, and attorney’s fees that could appropriately be taken
into account in determining the penalty on petitioner under
section 6673(a)(1) and Ms. Spaid’s liability to respondent under
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