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in Charczuk v. Commissioner, 771 F.2d 471, 475 (10th Cir. 1985),
affg. T.C. Memo. 1983-433, before imposing costs on a taxpayer’s
counsel under 28 U.S.C. sec. 1927: “Courts are in no way
obligated to tolerate arguments that thoroughly defy common
sense.” The conclusions to be drawn from the 861 argument
thoroughly defy common sense. We find that Mr. Sulla acted
recklessly in making the 861 argument and, thus, he acted in bad
faith.
3. Unreasonable and Vexatious Multiplication of the
Proceedings
Mr. Sulla unreasonably and vexatiously multiplied the
proceedings before the Court by championing petitioner’s initial,
frivolous arguments and by introducing a new frivolous argument,
the 861 argument. Either action is a ground to find him liable
for excess costs. This case should have concluded with
petitioner’s capitulation shortly after Mr. Sulla made his
appearance. Mr. Sulla’s actions caused needless delay; if he
caused additional expense to respondent, he should bear those
additional expenses. See Cook v. Am. S.S. Co., 134 F.3d 771, 774
(6th Cir. 1998) (in the context of 28 U.S.C. sec. 1927).
Before proceeding to determine the excess costs that Mr.
Sulla must bear, we pause to state that we are mindful that there
can be a thin line between zealous advocacy and frivolity. We
must be careful not to cross that line and impose costs on
zealous (but unsuccessful) advocacy. We must be careful not to
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