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Issue 4. Section 6673(a)(1) Penalty
Prior to trial, respondent cautioned petitioner of the
possibility of the Court's imposing a penalty if she pursued her
baseless claims and provided petitioner with an opportunity to
avoid the section 6673(a)(1) penalty. Petitioner failed to heed
respondent's warning. Accordingly, at trial, respondent requested
the Court to impose a penalty against petitioner pursuant to
section 6673(a)(1).
In relevant part, section 6673(a)(1) provides:
SEC. 6673(a). Tax Court Proceedings.--
(1) Procedures Instituted Primarily For
Delay, etc.--Whenever it appears to the Tax
Court that--
(A) proceedings before it have
been instituted or maintained by the
taxpayer primarily for delay,
(B) the taxpayer's position in
such proceeding is frivolous or
groundless, or
* * * * * * *
the Tax Court, in its decision, may require the taxpayer
to pay to the United States a penalty not in excess of
$25,000.
Respondent asserts that petitioner's position is frivolous and
groundless, and that petitioner instituted this lawsuit primarily
for delay. We agree with respondent that petitioner is liable for
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