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Because the Court is raising sua sponte the question whether
petitioner’s counsel should be liable for costs under section
6673(a)(2), we will defer setting the penalties to be imposed on
petitioner under section 6673(a)(1) until the parties have
responded to the Court’s inquiries into respondent’s excess costs
attributable to the conduct of petitioner and his counsel.
Section 6673(a)(2) Liability of Petitioner’s Counsel
Originally, the tax law provided for an award of damages
only against a taxpayer who instituted a case primarily for
delay. See Revenue Act of 1926, ch. 27, sec. 911, 44 Stat. (Part
II) 109. The damages provision was later adopted as section 6673
of the Internal Revenue Code of 1954.
In 1989, Congress added section 6673(a)(2) to provide for an
award of costs, expenses, and attorneys’ fees against an attorney
where an attorney, including an attorney appearing on behalf of
the Commissioner, has unreasonably and vexatiously multiplied the
proceedings in any case. Omnibus Budget Reconciliation Act of
1989, Pub. L. 101-239, sec. 7731(a), 103 Stat. 2400. Section
6673(a)(2) is derived from sec. 1927 of the Judicial Code, 28
U.S.C. sec. 1927 (1988). See H. Rept. 101-247, at 1399-1400
(1989).
In Harper v. Commissioner, 99 T.C. 533, 545 (1992), we noted
the dearth of opinions interpreting and applying section
6673(a)(2), and relied upon caselaw under 28 U.S.C. sec. 1927 for
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