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Court sustains respondent on the section 6662(a) accuracy-related
penalties for the years in question.
Section 6673(a) authorizes the Court to require a taxpayer
to pay to the United States a penalty not exceeding $25,000 when,
in the Court's judgment, proceedings have been instituted or
maintained by the taxpayer primarily for delay or where the
taxpayer's position in the proceeding is frivolous or groundless.
The Court considers petitioners' claim that they should not be
liable for the deficiencies and penalties to be frivolous and
groundless. Petitioners knew, or should have known, that a
substantial portion of the itemized deductions at issue was false
and could not be sustained. Petitioners knew that they could
deduct only amounts that they had actually paid. They made no
attempt to determine the qualifications of their return preparer
and, moreover, did not seek other professional advice to satisfy
the accuracy of their returns. Petitioners cited no legal
authority to the Court that, under similar facts, would exonerate
them from the penalties under section 6662(a).
The function of this Court is to provide a forum to decide
issues relating to liability for Federal taxes. Any reasonable
and prudent person, under the facts presented to the Court,
should have known that petitioners' claimed deductions could not
have been sustained, and petitioners knew that. This Court does
not and should not countenance the use of this Court as a vehicle
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