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4. Liability for Penalty Under Section 6673
Section 6673 authorizes this Court to award a penalty to the
United States not in excess of $25,000 whenever it appears to the
Court that proceedings have been instituted or maintained by the
taxpayer primarily for delay, the taxpayer’s position in such
proceedings is frivolous or groundless, or the taxpayer
unreasonably failed to pursue available administrative remedies.
Previously, on its own motion, this Court has awarded damages to
the United States where the taxpayer advanced frivolous and
groundless contentions. See Abrams v. Commissioner, 82 T.C. 403
(1984). In the instant case, petitioner claimed utterly
groundless casualty losses, arising from his former wife’s
decision to terminate a pregnancy almost 20 years earlier, in
amounts obviously calculated to offset the taxable income he
reported. Notwithstanding the Court’s warning that such claims
appeared frivolous, petitioner proceeded to trial. Petitioner
has wasted the time and resources of this Court and respondent.
We will accordingly exercise our discretion under section 6673 to
require petitioner to pay a penalty to the United States of
$1,000.
To reflect the foregoing,
Decision will be entered
under Rule 155.
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Last modified: May 25, 2011