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take petitioner’s belated concession into account in setting any
penalties that should be imposed.
Section 6673(a)(1) Penalties Against Petitioner
We agree with respondent that petitioner should be penalized
under section 6673(a)(1). Many of the positions he took when he
instituted this proceeding, and maintained throughout this
proceeding, were frivolous or groundless. Petitioner’s “Delpit,”
“Scar,” and “Agency” arguments were entirely without merit.
Petitioner’s insistence during most of the case on the validity
of the trusts in the face of overwhelming contrary legal
authority was unjustified.
We also believe that petitioner’s failure, before the
commencement of this case, to comply with respondent’s requests
for records (both his own records and the trusts’ records, which
he controlled), and the unreasonable demands he made on
respondent for answers to clearly frivolous and improper
questions, constitutes a failure to pursue available
administrative remedies. Had he produced his records when
requested by respondent, there would have been fewer disputed
issues at the commencement of this case, and the trial would have
been shorter and far better organized.
As a mitigating factor, petitioner made reasonable attempts
to cooperate with respondent during the trial, resulting in
stipulations to many of the issues originally in dispute.
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