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to established law and unsupported by a reasoned, colorable
argument for change in the law, see Coleman v. Commissioner, 791
F.2d 68, 71 (7th Cir. 1986). Section 6673(a)(2)(B) provides this
Court with the discretion to sanction respondent’s counsel if he
or she “unreasonably and vexatiously” multiples any proceedings
before us.
The mere fact that petitioners are defending the position
that was advertised to them in connection with their investment
in the subject VEBA’s is insufficient grounds to penalize each
petitioner under the facts herein. Petitioners are not directly
responsible for most of the actions listed by respondent in
support of his motion to impose penalties. Those actions are
best traced to petitioners’ counsel, and, given the facts of this
case, we decline to impute the actions of petitioners’ counsel to
petitioners themselves for the purposes of imposing a penalty
under section 6673(a)(1)(B). Petitioners have reasonably relied
on the advice of their trial counsel that their litigating
positions had merit. See Murphy v. Commissioner, T.C. Memo.
1995-76 (section 6673 penalty against taxpayer was inappropriate
where serious failure to present credible evidence at trial was
attributable to her counsel).
We conclude our report directing the parties to prepare
computations under Rule 155 in all but one of the docketed cases,
taking into account the cost of term life insurance for those
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