Brian G. Takaba - Page 1

                                   119 T.C. No. 18                                    

                               UNITED STATES TAX COURT                                

                           BRIAN G. TAKABA, Petitioner v.                             
                    COMMISSIONER OF INTERNAL REVENUE, Respondent                      

               Docket No. 5454-99.           Filed December 16, 2002                  

                    This case is before the Court to consider whether                 
               P must pay a penalty pursuant to sec. 6673(a)(1),                      
               I.R.C., and whether P’s counsel must pay certain of R’s                
               costs pursuant to sec. 6673(a)(2), I.R.C.  P, initially                
               pro se, made frivolous arguments, which were continued                 
               by P’s counsel, who further advocated the frivolous                    
               argument that the regulations under sec. 861, I.R.C.,                  
               establish that, although P is a U.S. citizen, P’s                      
               income in the form of remuneration for services and                    
               bank interest received from sources within the United                  
               States is not subject to tax.                                          
                    1.  Held:  P is liable for a penalty under sec.                   
               6673(a)(1), I.R.C., since his position in this case is                 
                    2.  Held, further, P’s counsel is liable for R’s                  
               excess costs under sec. 6673(a)(2), I.R.C., since he                   
               both knowingly and recklessly made frivolous arguments,                
               thus unreasonably and vexatiously multiplying these                    

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