unreasonably failed to pursue available administrative remedies,
section 6673 provides that the Court may require the taxpayer to
pay a penalty to the United States. As to positions taken after
December 31, 1989, in proceedings which are pending or commenced
after that date, the maximum amount of the penalty is $25,000.
Proceedings may be treated as instituted primarily for delay
where a taxpayer does not provide the Commissioner with
information or offer evidence at trial. Stamos v. Commissioner,
95 T.C. 624, 638 (1990), affd. without published opinion 956 F.2d
1168 (9th Cir. 1992). A position is groundless if the taxpayer
knew very well in advance of trial that there was no basis in law
or fact for the deductions he or she claimed. Horn v.
Commissioner, 90 T.C. 908, 946 (1988). If a taxpayer knew or
should have known that his or her position is without merit, a
court may and should impose sanctions. Coleman v. Commissioner,
791 F.2d 68, 71-72 (7th Cir. 1986). Unreasonable failure to
pursue available administrative remedies includes unreasonable
failures to respond to the Commissioner's requests to
substantiate deductions. Birth v. Commissioner, 92 T.C. 769, 774
(1989).
Wolf v. Commissioner, T.C. Memo. 1991-212, affd. 4 F.3d 709
(9th Cir. 1993), was the test case for taxpayers involved in the
Encore Leasing Tax Shelter Program. Petitioner was provided with
the opportunity to sign a stipulation agreeing to be bound by the
outcome in Wolf v. Commissioner, supra. Petitioner did not agree
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