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for 1987 or 1988, nor has he shown that any of the statutory
exceptions are applicable in this case. We therefore hold that
petitioner is liable for the section 6654(a) additions to tax for
1987 and 1988.
The fifth issue for decision is whether we should impose a
penalty on petitioner pursuant to section 6673(a).
Whenever it appears to this Court that proceedings before it
have been instituted or maintained by the taxpayer primarily for
delay or the taxpayer's position in such proceeding is frivolous
or groundless, the Court, in its discretion, may require the
taxpayer to pay to the United States a penalty not in excess of
$25,000. Sec. 6673(a)(1)(A) and (B). A position maintained by a
taxpayer in the Tax Court is frivolous "if it is contrary to
established law and unsupported by a reasoned, colorable argument
for change in the law." Coleman v. Commissioner, 791 F.2d 68, 71
(7th Cir. 1986). A penalty is properly imposed when the taxpayer
knew or should have known that his claim or argument was
frivolous. Hansen v. Commissioner, 820 F.2d 1464, 1470 (9th Cir.
1987).
The amended petition filed in this case alleges that
respondent erred in the statutory notices of deficiency "in
holding that or proceeding as if the Petitioner is a person made
liable to the income tax imposed by the Code."
The other allegations of fact listed in petitioner's amended
petition and the arguments contained in his trial memorandum
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