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determination that petitioners are liable for the section 6662(a)
penalty.
Section 6673 Penalty
Section 6673(a)(1)(A) and (B) authorizes the Court to impose
a penalty of up to $25,000 wherever proceedings have been
instituted or maintained by the taxpayer primarily for delay, or
whenever the taxpayer’s position in a proceeding is frivolous or
groundless. Respondent argues that we should impose a section
6673(a) penalty because petitioners’ positions in this proceeding
were frivolous and without merit and petitioners instituted this
lawsuit primarily for delay.
We decline to impose a penalty under section 6673 in this
case. Petitioners do not appear to have instituted or maintained
this proceeding primarily for delay. Petitioners abandoned their
arguments regarding the validity of their trusts prior to trial
and conceded their liability for deficiencies to be calculated
pursuant to Rule 155. Petitioners’ argument regarding the
section 6662(a) penalty was neither frivolous nor groundless.
Conclusion
We have carefully considered all remaining arguments made by
the parties for contrary holdings and, to the extent not
discussed, find them to be irrelevant or without merit.
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Last modified: May 25, 2011