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that if it appears to the Court that a proceeding has been
maintained primarily for delay or the taxpayer’s position is
frivolous or groundless, the Court may award a penalty to the
United States in an amount not in excess of $25,000. See sec.
6673(a)(1). We admit that we are concerned about petitioner’s
motives in pursuing this litigation. Prior to the evidentiary
hearing, the Court told Mr. Kamerman, petitioner’s counsel at the
time, that if the two partnerships were substantially the same,
there was no misrepresentation of a material fact for purposes of
section 7121(b). At the hearing, petitioner failed to introduce
any probative evidence on this point. On the other hand, while
petitioner’s position on the misrepresentation of a material fact
is highly suspect, we cannot say that his argument concerning the
closing agreement was frivolous or made primarily for delay even
though we may disagree with its conclusion. Accordingly, we
shall deny respondent’s motion for a penalty under section
6673(a).
An appropriate order will
be issued, and decision will be
entered under Rule 155.
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Last modified: May 25, 2011