Daniel and Sally A. Holguin - Page 13

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               Based upon our examination of the entire record before us,             
          we find that respondent did not abuse respondent’s discretion in            
          determining to proceed with the collection action as determined             
          in the notice of determination with respect to Mr. Holguin’s                
          unpaid liabilities for 1994, 1995, and 1996.                                
               In respondent’s motion for summary judgment as to Mr.                  
          Holguin, respondent requests that the Court require Mr. Holguin             
          to pay a penalty to the United States pursuant to section                   
          6673(a)(1).  Section 6673(a)(1) authorizes the Court to require a           
          taxpayer to pay to the United States a penalty in an amount not             
          to exceed $25,000 whenever it appears to the Court, inter alia,             
          that a proceeding before it was instituted or maintained primar-            
          ily for delay, sec. 6673(a)(1)(A), or that the taxpayer’s posi-             
          tion in such a proceeding is frivolous or groundless, sec.                  
          6673(a)(1)(B).                                                              
               In Pierson v. Commissioner, 115 T.C. 576, 581 (2000), we               
          issued an unequivocal warning to taxpayers concerning the imposi-           
          tion of a penalty under section 6673(a) on those taxpayers who              
          abuse the protections afforded by sections 6320 and 6330 by                 
          instituting or maintaining actions under those sections primarily           
          for delay or by taking frivolous or groundless positions in such            




               13(...continued)                                                       
          the Commissioner of Internal Revenue in such other cases.  See,             
          e.g., Smith v. Commissioner, T.C. Memo. 2003-45.                            




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