David J. Edwards - Page 15

                                       - 15 -                                         
          Discussion                                                                  
               Section 6673(a)(1) Liability of Petitioner                             
               Section 6673(a)(1) allows the Tax Court to impose a penalty            
          of up to $25,000, payable to the United States, when (A) a                  
          taxpayer institutes or maintains a proceeding in the Tax Court              
          primarily for delay, (B) the taxpayer’s position in the                     
          proceeding is frivolous or groundless, or (C) the taxpayer                  
          unreasonably failed to pursue available administrative remedies.            
               In the case at hand, we hold that petitioner is subject to a           
          penalty under section 6673(a)(1) because he has taken frivolous             
          and groundless positions and unreasonably failed to pursue                  
          available administrative remedies.  Many of the positions                   
          petitioner maintained throughout the Court proceedings were                 
          frivolous or groundless.  Petitioner’s “Delpit”, “Scar”, and                
          “Agency” arguments were entirely without merit.  Petitioner’s               
          insistence, during most of the case, on the validity of the                 
          trusts in the face of overwhelming contrary legal authority was             
          unjustified.  At the administrative level, petitioner’s failure             
          to pursue available administrative remedies was unreasonable:               
          Petitioner refused to provide trust information to respondent’s             
          examiner, refused to produce records to support his return,                 
          demanded written answers to irrelevant questions before he would            
          consider cooperating with respondent, made frivolous arguments in           
          response to a formal summons and failed to produce the records              






Page:  Previous  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  22  23  24  Next

Last modified: May 25, 2011