- 19 -
See Nestor v. Commissioner, 118 T.C. 162, 165 (2002).
In the absence of any valid issue for review, and for the
foregoing reasons, we conclude that respondent is entitled to
judgment as a matter of law sustaining each notice of deficiency
issued to petitioners.
III. Penalty Motion
Section 6673(a)(1) authorizes this Court to require a
taxpayer to pay to the United States a penalty not in excess of
$25,000 whenever it appears that proceedings have been instituted
or maintained by the taxpayer primarily for delay or that the
taxpayer’s position in such proceeding is frivolous or
groundless. A position maintained by the taxpayer is “frivolous”
where it is “contrary to established law and unsupported by a
reasoned, colorable argument for change in the law.” Williams v.
Commissioner, 114 T.C. 136, 144 (2000) (quoting Coleman v.
Commissioner, 791 F.2d 68, 71 (7th Cir. 1986)). This proceeding
was petitioners’ first appearance before this Court. Respondent
first raised the penalty motion at the hearing. In view of the
circumstances of this case and the nature of petitioners’ RFRA
arguments, we shall deny respondent’s motion and we shall not
impose the penalty. Nevertheless, we place petitioners on notice
that if petitioners institute or maintain a proceeding with
frivolous arguments in the future, this Court may impose such a
penalty.
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