to such stipulation. Respondent advised petitioner that if his
case were litigated, respondent would file a motion for a penalty
under section 6673. In Wolf v. Commissioner, supra, respondent
was sustained on all issues including the additions to tax and a
damage award under section 6673. Respondent argues that the
instant case is indistinguishable from Wolf, and as such, is
frivolous, meriting an award of damages under section 6673.
We have carefully considered the particular circumstances of
the instant case, and although we have found the lease
transaction to be devoid of economic substance, we do not find
petitioner’s position to be frivolous. We have determined that
petitioner lacked due care and did not take the steps an
ordinarily prudent person would have taken with respect to
claiming the deductions and investment tax credit attributable to
his investment in Encore; however, in the particular setting of
this case and exercising our discretion, we decline to award a
penalty under section 6673 in this proceeding. Accordingly,
respondent’s motion for a penalty under section 6673 is denied.
To reflect the foregoing,
An appropriate order and
decision will be entered.
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