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constitutes taxable income. Respondent’s determination on this
issue is sustained.
Respondent determined that petitioners are liable for
accuracy-related penalties pursuant to section 6662(a) for
negligence or disregard of rules or regulations.1 In their
petition, petitioners assigned no error to that determination,
nor did they assert either in their trial memorandum or at trial
that the section 6662 penalties are in dispute. Petitioners
failed to offer any evidence that their underpayments were not
due to negligence or that they did not disregard rules or
regulations. Respondent’s determination of penalties under
section 6662(a) is sustained.
The Tax Court is authorized under section 6673(a)(1) to
require the taxpayer to pay to the United States a penalty not in
excess of $25,000 when it appears to the Court that the
taxpayer’s position in the proceeding is frivolous or groundless.
Petitioners’ position, based on stale and meritless contentions,
is manifestly frivolous and groundless, and their action has
resulted in the waste of limited judicial and administrative
resources. Previously, on its own motion, this Court has awarded
damages to the United States under section 6673 where the
taxpayer advanced frivolous and groundless contentions similar to
1 In the notices of deficiency for each of the years at
issue, respondent determined that petitioners were liable for
civil fraud penalties pursuant to sec. 6663, or in the
alternative, accuracy-related penalties pursuant to sec. 6662.
At trial, respondent abandoned the imposition of civil fraud
penalties.
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Last modified: May 25, 2011