Drew Allen Rayner - Page 7




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          position is frivolous or groundless, or if the taxpayer                     
          unreasonably failed to pursue administrative remedies.  Sec.                
          6673.  A taxpayer's position is frivolous or groundless if it is            
          contrary to established law and unsupported by a reasoned,                  
          colorable argument for change in the law.  Coleman v.                       
          Commissioner, 791 F.2d 68, 71 (7th Cir. 1986).  Petitioner                  
          contends that his argument is not frivolous and that he is not              
          using this case for delay.  We disagree.  Respondent told                   
          petitioner by letter dated June 3, 1999, that his return included           
          frivolous arguments that had no basis in law.  Petitioner                   
          responded by letter dated July 2, 1999, in which he repeated his            
          legal position.  In letters dated January 17 and 29, 2001,                  
          respondent asked petitioner for his legal and factual basis for             
          excluding amounts reported on the Forms 1099 attached to                    
          petitioner’s 1998 income tax return.  Petitioner responded with a           
          document in which he contends that only income from international           
          or foreign commerce is taxable.  Respondent gave copies of 18               
          cases to petitioner in which courts had rejected his argument and           
          warned him of the potential for liability under section 6673.               
          Despite this, petitioner persisted in maintaining frivolous                 
          positions in his pretrial memorandum and other documents filed              
          with the Court.                                                             
               Petitioner took frivolous positions in a prior case.  See              
          Rayner v. United States, 2001-1 USTC par. 50,342, 87 AFTR 2d                
          2001-1649 (5th Cir. 2001).  In that case, the U.S. Court of                 
          Appeals for the Fifth Circuit affirmed dismissal of petitioner’s            





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