Kenneth Lee Anderson and Carol Jane - Page 14




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          responsive answers and denials to respondent's Third Request for            
          Admissions, the case could have been settled or tried on the                
          merits, which would have resulted in the Court's exercise of its            
          judicial function in the traditional way.                                   
               We conclude, with respect to the second phase of this case,            
          that petitioners' failures to respond and appear have caused the            
          further proceedings herein to have been "maintained by the                  
          taxpayer primarily for delay" within the meaning of section                 
          6673(a)(1).  We therefore shall require petitioners to pay an               
          additional penalty of $1,000, to be added to the $10,000 penalty            
          previously decided by reason of petitioners' frivolous and                  
          groundless arguments with respect to the first phase of this                
          case.                                                                       


                                             An appropriate order and                 
                                        decision will be entered.                     



















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