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Commissioner, supra. On this record, the Court sustains
respondent on the section 6662(a) accuracy-related penalties for
the 3 years at issue.
Section 6673(a) authorizes the Court to require a taxpayer
to pay to the United States a penalty not exceeding $25,000 when,
in the Court's judgment, proceedings have been instituted or
maintained by the taxpayer primarily for delay or where the
taxpayer's position in the proceeding is frivolous or groundless.
Although petitioners conceded the deficiencies and challenged
only the penalties under section 6662(a), the Court considers
petitioners' claim that they should not be liable for the
penalties to be frivolous and groundless. Petitioners knew that
a substantial portion of the itemized deductions at issue was
false and could not be sustained. Other circumstances noted
above need not be repeated here.
The function of this Court is to provide a forum to decide
issues relating to liability for Federal taxes. At trial,
petitioners realized that they had no case with respect to the
deficiencies but chose to continue to challenge the imposition of
the penalties under section 6662(a). Any reasonable and prudent
person, under the facts presented to the Court, should have known
that the claimed deductions could not be sustained, and
petitioners knew that. We do not and should not countenance the
use of this Court as a vehicle for disgruntled litigants to
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Last modified: May 25, 2011