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The cases were set for trial on the following day, June 13, 1995.
At the calendar call, petitioner Angela Matthews conceded that
she received $59,147 in income during 1991, and petitioner
Richard Matthews conceded that he received $113,048 in income
during 1991. At trial, petitioners conceded the amounts of the
deficiencies and the additions to tax as determined and claimed
by respondent.
At trial, Mr. Ray made a number of arguments including: (1)
The substitute for return prepared by respondent does not
constitute a valid return; (2) the IRS does not have the
statutory authority to determine a deficiency since petitioners
failed to file returns; (3) petitioners do not bear the burden of
proof as mandated by Rule 142(a) because said rule is not
explicitly authorized by statute; (4) the IRS is seeking to
collect a "penalty * * * in regard to a W-4, which is a subtitle
C tax" that is not collectible by the IRS; and (5) the addition
to tax is a non-compliance penalty which may only be asserted
through an action maintained in U.S. District Court. Respondent
argues that petitioners' claims are frivolous and groundless, and
asks this Court to impose penalties against petitioners and costs
against counsel pursuant to section 6673(a)(1) and (2),
respectively. Petitioners oppose respondent's motion as
unwarranted and excessive.
At the outset we note that the arguments made by Mr. Ray are
without factual and legal foundation and appear to represent a
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