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effort made by the Castros and any advisers with whom they may
have consulted to ascertain whether the trust structure at issue
in these consolidated cases would be respected for Federal income
tax purposes. Absent such proof, we cannot relieve petitioners
of liability for the accuracy-related penalties under section
6662(a) and (b)(1). See Neely v. United States, 775 F.2d 1092,
1095 (9th Cir. 1985); George v. Commissioner, T.C. Memo. 1999-
381; Hanson v. Commissioner, T.C. Memo. 1981-675; sec. 1.6664-
4(b)(1), Income Tax Regs. We sustain respondent’s determination
that petitioners are liable for accuracy-related penalties
pursuant to section 6662(a) for 1995 and 1996 on any underpayment
of income tax that may be due as a result of this opinion.
V. Section 6673 Penalty
Section 6673(a)(1)(A) and (B) provides that this Court may
impose a penalty of up to $25,000 whenever 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. Before trial, respondent warned the Castros that
respondent intended to move for a penalty under section 6673 and
gave the Castros copies of cases supporting respondent’s
contention that their arguments lacked merit.
We are satisfied that the Castros did not institute or
maintain these proceedings primarily for delay. The Castros’
belief that their trust structure should be respected for Federal
income tax purposes was sincere if uninformed by any reasonable
analysis of pertinent authority. In addition, there is no
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