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15, 1993, and Lakewood neither requested nor received an
extension from that date. Respondent determined that Lakewood’s
untimely filing made it liable for an addition to tax under
section 6651(a) equal to 15 percent of the underpayment, and
Lakewood has not shown reasonable cause for its untimely filing.
We sustain respondent’s determination and hold that Lakewood is
liable under section 6651(a) for an addition to tax of 5 percent
for each month during which its failure continued, or, in other
words, a 15-percent addition to tax as determined by respondent.
See sec. 6651(a)(1); see also Rule 142(a).
9. Penalties Under Section 6673(a)(1)(B)
Respondent moves the Court under section 6673(a)(1)(B) to
impose a $25,000 penalty against each petitioner, asserting that
petitioners’ positions in this proceeding are frivolous and
groundless. Respondent asserts that the C-group product is a
“deceptive subterfuge” that was “designed to deceive on its
face”. Respondent asserts that petitioners have not proven the
critical allegations set forth in their petitions as to the
operation of the C-group product and that, at trial, petitioners,
through their counsel, Mr. Prupis and Kevin Smith (Mr. Smith),
contested unreasonably the admissibility of documents that
respondent obtained from third parties as to the workings of the
C-group product. Respondent asserts that petitioners, through
Messrs. Prupis and Smith, failed to comply fully with discovery
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