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frivolous or groundless), and (B) Ms. Sluyter show cause why she
should not be required to pay costs pursuant to section
6673(a)(2) (which provides that costs may be imposed on counsel
who has multiplied the proceedings in any case unreasonably and
vexatiously).
Motions to Compel
On April 24, 2000, by one consolidated motion, made in each
of these cases, respondent moved to compel (1) production of
documents and (2) answers to interrogatories (the motions to
compel). In support of the motions to compel, respondent set
forth a history of unfulfilled requests for both informal and
formal discovery. In support of the motion to compel answers to
interrogatories, respondent set forth the following description
of an April 4, 2000, meeting among respondent’s counsel,
Ms. Sluyter, and an individual named Mark MacDonald:
On April 4, 2000, respondent’s counsel met with
attorney Sluyter and Mark MacDonald, a representative
of petitioners, regarding respondent’s informal and
formal discovery requests and about the legal theories
presented in these consolidated cases. Attorney
Sluyter and Mr. MacDonald set forth a variety of
arguments on petitioners’ behalf, including: (1) that
what the United States government calls the “federal
law” is not applicable to petitioners Frank [Hae-Rong]
and Lucy Ni, (2) that Frank [Hae-Rong] and Lucy Ni have
no affiliation to the “so-called United States,”
(3) that the Internal Revenue Service has no
jurisdiction to audit the income tax returns of Frank
[Hae-Rong] and Lucy Ni, and (4) that Frank [Hae-Rong]
and Lucy Ni can have no tax liability because no
consideration exists between the Ni’s and the United
States government. Further, Attorney Sluyter stated
that petitioners would not be providing respondent’s
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