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(B) the taxpayer’s position in such
proceeding is frivolous or groundless, or
(C) the taxpayer unreasonably failed to
pursue available administrative remedies,
the Tax Court, in its decision, may require the
taxpayer to pay to the United States a penalty not in
excess of $25,000.
3. Discussion
A taxpayer’s position is frivolous “if it is contrary to
established law and unsupported by a reasoned, colorable argument
for change in the law. * * * The inquiry is objective. If a
person should have known that his position is groundless, a court
may and should impose sanctions.” Coleman v. Commissioner, 791
F.2d 68, 71 (7th Cir. 1986); see also Hansen v. Commissioner, 820
F.2d 1464, 1470 (9th Cir. 1987) (trial court’s finding that
taxpayer should have known that claim was frivolous allows for
section 6673 penalty); Booker v. Commissioner, T.C. Memo.
1996-261.
We have already concluded that the petitions make nothing
but frivolous arguments. See supra sec. I.B. Hae-Rong Ni is
both petitioner in his own right and, as trustee, petitioner for
the trusts. He was not represented by counsel when he filed the
petitions in these cases. Attached to respondent’s memorandum is
a copy of a diploma issued by Oregon State University in 1984,
conferring on one Hae-Rong Ni the degree of Doctor of Philosophy.
In respondent’s memorandum, he states that Hae-Rong Ni is highly
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