Sarah A. Bland-Barclay and Francis Barclay - Page 9

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          return, they are liable for the negligence penalty under section            
               At the hearing of petitioners’ motion to dismiss and before            
          the trial, the Court admonished petitioner against arguing that             
          wage income was not includable in gross income and therefore not            
          subject to income tax.  Petitioner ignored our warning.  Section            
          6673(a)(1) allows this Court to award a penalty not in excess of            
          $25,000 when proceedings have been instituted or maintained                 
          primarily for delay, or where the taxpayer’s position is                    
          frivolous or groundless; i.e., it is contrary to established law            
          and unsupported by a reasoned, colorable argument for a change in           
          the law.  Coleman v. Commissioner, 791 F.2d 68, 71 (7th Cir.                
          1986), affg. in part an unreported order of this Court.  We                 
          believe that a penalty in this case is appropriate.  The                    
          positions argued by petitioner are frivolous and wholly without             
          merit.  Moreover, we rejected petitioner’s frivolous arguments              
          when she raised them in her motion to dismiss.  Accordingly, we             
          will require petitioners to pay a penalty to the United States in           
          the amount of $1,500 under section 6673(a)(1).                              
               To reflect the foregoing,                                              
                                             An appropriate order                     
                                        imposing the penalty under                    
                                        section 6673(a), and decision                 
                                        will be entered for respondent.               

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