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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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