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adequate books and records, created false invoices, and presented
documents not believed by the Court to be related to legitimate
business expense deductions. At a minimum, petitioners displayed
a lack of due care and failed to act as reasonable, prudent
persons would under the circumstances.
On the basis of the entire record, we find that petitioners
were negligent and hold that petitioners are liable for an
accuracy-related penalty under section 6662(a) for the 1993 tax
year. Respondent is sustained on this issue.
6. Section 6673 Penalty
As relevant herein, section 6673(a)(1) authorizes the Tax
Court to require a taxpayer to pay to the United States a penalty
not in excess of $25,000 whenever it appears that proceedings
have been instituted or maintained by the taxpayer primarily for
delay or that the taxpayer’s position in such proceeding is
frivolous or groundless.
The record in this case is replete with numerous examples of
instances where petitioners have delayed these proceedings,
advanced frivolous and groundless arguments, and presented false
documents to respondent and the Court. See supra pp. 4-13.
For example, petitioners failed to (1) meet with respondent
on several occasions, (2) enter into a stipulation of facts, (3)
present organized documents, and (4) comply with a court order.
Petitioners also presented tax-protester rhetoric at trial
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