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Section 6654(a) imposes an addition to tax equal to the
amount of the underpayment multiplied by the underpayment rate
established under section 6621 for the period of the
underpayment. The addition to tax under section 6654(a) is
mandatory unless petitioner can prove that he complies with one
of the exceptions contained in section 6654(e). See Baldwin v.
Commissioner, 84 T.C. 859, 871 (1985); Grosshandler v.
Commissioner, 75 T.C. 1, 20-21 (1980). Petitioner did not
introduce evidence on this issue, and we sustain respondent's
determination of the addition to tax under section 6654.
Section 6673(a)(1) allows this Court to award a penalty not
in excess of $25,000 when proceedings have been instituted or
maintained primarily for delay, or where the taxpayer's position
is frivolous or groundless; i.e., it is contrary to established
law and unsupported by a reasoned, colorable argument for a
change in the law. See Coleman v. Commissioner, 791 F.2d 68, 71
(7th Cir. 1986); Kish v. Commissioner, T.C. Memo. 1998-16;
Talmage v. Commissioner, supra. In our opinion, such is the case
here, and we believe that a penalty is appropriate. The
positions argued by petitioner are frivolous and wholly without
merit. Moreover, we previously rejected petitioner's frivolous
arguments when he raised them by motion for summary judgment.
Accordingly, petitioner was fully warned of our opinion with
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Last modified: May 25, 2011