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3. Discussion
a. Bad Faith
Section 6673(a)(2) is a relatively new provision,7 and, in
Harper v. Commissioner, 99 T.C. 533 (1992), we discussed fully
the standards for imposing costs under it. While there may be
some question as to whether, before we impose costs, we must find
that the attorney or other person admitted to practice before the
Tax Court (without distinction, attorney) acted in bad faith, see
Harper v. Commissioner, supra at 545, we have no trouble in
finding that, in these cases, Ms. Sluyter did act in bad faith.
The standard of bad faith that we believe is here satisfied is
the standard described by us in Harper v. Commissioner, viz.,
that the challenged actions are entirely without colorable
pretext or basis and are taken for reasons of harassment or delay
or for other improper purposes. Harper v. Commissioner, supra at
546. For purposes of determining bad faith, a claim is colorable
if it has some legal and factual support, considered in light of
the reasonable beliefs of the individual making the claims. See
Nemeroff v. Abelson, 620 F.2d 339, 348 (2d Cir. 1980) (citing
“ABA Model Rules of Professional Conduct" sec. 3.3, Comment
(Discussion Draft 1980)); see also Golden Eagle Distrib. Corp. v.
7 Sec. 6673(a)(2) was added to the Code by sec. 7731(a) of
the Omnibus Budget Reconciliation Act of 1989, Pub. L. 101-239,
103 Stat. 2106, 2400, and applies to positions taken after
Dec. 31, 1989, in proceedings pending on or commenced after such
date.
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