Stephen C. Smith - Page 4




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          allegations.                                                                
               Petitioner sent respondent interrogatories, and requests for           
          admissions and production of documents, all of which were                   
          frivolous (e.g., petitioner is not a “person liable” for tax; he            
          did not volunteer to file returns or pay tax; respondent’s                  
          employees lacked authority; the substitute for return is                    
          invalid).                                                                   
               On May 7, 1999, respondent’s counsel sent petitioner a                 
          letter stating that petitioner had taken tax protester type                 
          positions which could result in imposition of monetary sanctions.           
          Respondent’s counsel attached to the letter copies of 11 recent             
          Tax Court cases in which we rejected arguments similar to those             
          raised by petitioner.  On August 19, 1999, respondent’s counsel             
          sent another letter to petitioner in which he said that                     
          petitioner had not cooperated in preparing for trial and advised            
          petitioner that he could be subject to a penalty under section              
          6673.  Respondent’s counsel attached a copy of section 6673 to              
          the August 19, 1999, letter.  Petitioner filed a motion for                 
          summary judgment and a pretrial memorandum in which he made only            
          frivolous arguments.  He did not dispute any of the adjustments             
          in the notice of deficiency.  We denied his motion for summary              
          judgment.                                                                   
               In respondent’s pretrial memorandum, respondent contended              
          that petitioner is liable for the section 6673 penalty.  At                 






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