Angela Matthews - Page 9

                                                - 9 -                                                 
                  Respondent also seeks to have this Court award costs against                        
            Mr. Ray pursuant to section 6673(a)(2)(A).6  For a history of                             
            section 6673(a)(2) and a full discussion of the standards to be                           
            considered, see Harper v. Commissioner, 99 T.C. 533, 545 (1992);                          
            see also Murphy v. Commissioner, T.C. Memo. 1995-76; Leach v.                             
            Commissioner, T.C. Memo. 1993-215.  We stated in Murphy as                                
                  Section 6673(a)(2) is derived from section 1927 of the                              
                  Judicial Code, 28 U.S.C. section 1927 (1988), and it                                
                  has been held that imposition of a sanction under 28                                
                  U.S.C. section 1927 requires a "clear showing of bad                                
                  faith".  See, e.g., Oliveri v. Thompson, 803 F.2d 1265,                             
                  1273 (2d Cir. 1986); Kamen v. American Telephone &                                  
                  Telegraph Co., 791 F.2d 1006, 1010 (2d Cir. 1986).                                  
                  However, a minority of Courts of Appeals, including the                             
                  Court of Appeals for the District of Columbia Circuit,                              
                  do not require such a showing.  Reliance Ins. Co. v.                                
                  Sweeney Corp., 792 F.2d 1137, 1138 (D.C. Cir. 1986);                                
                  see also In Re Ruben, 825 F.2d 977, 983-984 (6th Cir.                               
                  1987).  This Court has not decided which standard we                                
                  will apply. * * * [Fn. ref. omitted.]                                               
            We are satisfied that Mr. Ray acted in bad faith.  The                                    
            position argued by him is frivolous and groundless.  As in Sauers                         
            v. Commissioner, petitioners' counsel did not dispute the                                 
            deficiencies and additions to tax but "raised a litany of legal                           
            arguments typical of those asserted by 'tax protesters.'"  Sauers                         

            6  The failure of this Court to impose sanctions against                                  
            petitioners pursuant to sec. 6673 does not necessitate a finding                          
            that these sanctions should not be levied against counsel for                             
            petitioners as well.  To the contrary, we may determine that                              
            petitioners' counsel's actions warrant imposition of a sanction                           
            despite our failure to impose such sanctions against petitioners.                         
            See Harper v. Commissioner, 99 T.C. 533 (1992), in which this                             
            Court granted sec. 6673 sanctions against taxpayers' counsel but                          
            not against taxpayers.                                                                    

Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  Next

Last modified: May 25, 2011