- 9 -
B. Section 6673 Penalty
Respondent moves that the trusts be required to pay a
penalty to the United States of up to $25,000 on grounds that
they instituted or maintained these proceedings primarily for
delay, their positions are frivolous or groundless, and they
unreasonably failed to pursue administrative remedies. Sec.
6673(a).
A taxpayer’s position is frivolous or groundless if it is
contrary to established law and unsupported by a reasoned,
colorable argument for change in the law. Coleman v.
Commissioner, 791 F.2d 68, 71 (7th Cir. 1986). The trusts’
section 861 argument clearly is frivolous. See Takaba v.
Commissioner, 119 T.C. 285, 294-295 (2002); Williams v.
Commissioner, 114 T.C. 136, 138-139 (2000); Corcoran v.
Commissioner, T.C. Memo. 2002-18, affd. 54 Fed. Appx. 254 (9th
Cir. 2002). The trusts’ contention that they are not liable for
tax because respondent did not identify the Code sections which
establish their liability for tax is frivolous. See Nestor v.
Commissioner, 118 T.C. 162, 167 (2002). The trusts’ argument
that the Commissioner and his or her delegates lack authority to
administer the internal revenue laws is frivolous. See Lonsdale
v. United States, 919 F.2d 1440, 1445-1447 (10th Cir. 1990).
Section 6330(c)(1) requires the Appeals officer to verify
that the requirements of any applicable law or administrative
Page: Previous 1 2 3 4 5 6 7 8 9 10 Next
Last modified: May 25, 2011