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(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.
Petitioner did not specify in this case his theory why his
wages and other income are not taxable. All of the items
included in respondent’s determination of income are identified
as gross income in section 61 and taxable under sections 1 and
63. Arguments that wages are not taxable income, in whatever
form they appear, have been repeatedly and resoundly rejected in
innumerable cases, leading to sanctions against taxpayers at the
trial and appellate levels. See, e.g., Coleman v. Commissioner,
791 F.2d 68 (7th Cir. 1986); Connor v. Commissioner, 770 F.2d 17
(2d Cir. 1985).
Respondent has asked for a penalty in the maximum amount of
$25,000 in this case because, despite warnings a year earlier,
petitioner continued to maintain the same frivolous positions and
to impose extra burdens on respondent in securing evidence that
should have been stipulated by petitioner.
The purpose of section 6673 is to deter litigants from
pursuing frivolous and dilatory claims that impose needless costs
on the courts and on respondent. See, e.g., Coleman v.
Commissioner, supra at 72; Abrams v. Commissioner, 82 T.C. 403
(1984). Considering prior notice to petitioner that his claims
were frivolous and the amounts involved, respondent’s motion for
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