- 84 -
Accordingly, we sustain respondent’s determination with respect
to that penalty.
Penalty Under Section 6673(a)(1)
On brief, respondent asks the Court to require petitioners
to pay a penalty to the United States pursuant to section
6673(a)(1).
Section 6673(a)(1) authorizes the Court to require a tax-
payer to pay to the United States a penalty in an amount not to
exceed $25,000 whenever it appears to the Court that, inter alia,
the taxpayer’s position in a proceeding before it is frivolous or
groundless. See sec. 6673(a)(1)(B). The Court may impose a
penalty under section 6673(a)(1)(B) even if it finds that not all
of the taxpayer’s arguments are frivolous or groundless. See
Sloan v. Commissioner, 102 T.C. 137, 148 (1994), affd. 53 F.3d
799 (7th Cir. 1995).
A position is frivolous when it is “contrary to established
law and unsupported by a reasoned, colorable argument for change
in the law.” Coleman v. Commissioner, 791 F.2d 68, 71 (7th Cir.
1986). The word “groundless” is a word of common usage. Web-
ster’s Third New International Dictionary Unabridged 1003 (1993)
provides the following definition of that word: “having no
ground or foundation: lacking cause or reason for support”.
In support of respondent’s position that the imposition on
petitioners of a penalty under section 6673(a)(1) is appropriate,
Page: Previous 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 NextLast modified: May 25, 2011