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Penalties Under Section 6673(a)
Section 6673(a)(1) allows the Tax Court to impose a penalty
of up to $25,000, payable to the United States, when (A) a
taxpayer institutes or maintains a proceeding primarily for
delay, (B) the taxpayer’s position in the proceeding is frivolous
or groundless, or (C) the taxpayer unreasonably failed to pursue
available administrative remedies. Section 6673(a)(2) allows the
Tax Court to require counsel who unreasonably and vexatiously
multiply the proceedings before the Tax Court to pay the other
party’s excess costs, expenses, and attorney’s fees.
Respondent has asked us to impose section 6673(a)(1)
penalties against petitioner because he made frivolous or
groundless arguments regarding: (1) The “Delpit” issue, (2) the
“Scar” issue, (3) the “Agency” issue, and, until 12 days before
posttrial briefs were due, (4) the abusive trust issue. In
reply, petitioner argues these were all strong and proper legal
arguments of first impression. In his reply brief, petitioner
asks us to include in our opinion a detailed ruling on each of
these issues. We consider each of these arguments--and
petitioner’s request--in deciding whether to impose section
6673(a)(1) sanctions against petitioner and section 6673(a)(2)
sanctions against petitioner’s counsel.
The “Delpit” Issue
Petitioner argued throughout the case, despite the Court’s
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