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the imposition of the addition and penalty cannot stand.
Respondent's determinations are clearly correct and must be
sustained. Petitioners filed their return more than a year and
a half late. Their return position was inexcusably groundless,
and their arguments have been clearly frivolous. As such, they
evidence petitioners' continuing failure to make any reasonable
attempt to comply with the applicable provisions of the Internal
Revenue Code. The addition and penalty clearly apply to the
underpayment to be determined in the Rule 155 computation.
We now turn to respondent's motion to impose a penalty under
section 6673. Petitioners received a warning that respondent
would move for a penalty under section 6673 because their
position was groundless and their arguments frivolous.
Respondent furnished petitioners with copies of similar cases, in
which, after upholding the Commissioner's determinations, the
Court imposed such a penalty on the taxpayers and in which the
Court's decision to impose a penalty was upheld by the Courts of
Appeals. Petitioners were given ample opportunity to recede in
the face of the evidence provided by the Court and respondent of
the overwhelming likelihood, amounting to certainty, that they
would lose their case and that a penalty would be imposed if they
persisted in their misguided time- and resource-consuming course
of action. Petitioners' position in this case has been
groundless and their arguments frivolous from the time they first
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