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(A) proceedings before it have been instituted
or maintained by the taxpayer primarily for delay,
(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.
The purpose of section 6673 is to compel taxpayers to think
and to conform their conduct to settled principles before they
file returns and litigate. Coleman v. Commissioner, 791 F.2d 68,
71 (7th Cir. 1986); see also Grasselli v. Commissioner, T.C.
Memo. 1994-581 (quoting Coleman). A petition to the U.S. Tax
Court is frivolous if it is contrary to established law and
unsupported by a reasoned, colorable argument for change in the
law. We need not find specific damages to impose a penalty under
section 6673(a)(1); rather, that section is a penalty provision,
intended to deter and penalize frivolous claims and positions in
deficiency proceedings. Bagby v. Commissioner, 102 T.C. 596,
613-614 (1994). The J. Shirleys do not here argue for any change
in the law, and there are numerous cases that establish that
taxpayers cannot use trusts, as the J. Shirleys have attempted to
do, to avoid tax or shift income from one taxpayer to another.
See, e.g., Zmuda v. Commissioner, 79 T.C. 714 (1982); Vercio v.
Commissioner, 73 T.C. 1246 (1980); Wesenberg v. Commissioner,
69 T.C. 1005 (1978); Barmes v. Commissioner, T.C. Memo. 2001-155;
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