John Parks Trowbridge - Page 24

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          case, we conclude that petitioners are liable for such additions            
          to tax.  Except as noted below,14 we also accept respondent’s               
          computation of the amounts of those additions as set forth in the           
          notices of deficiency.                                                      
          III.  Section 6673(a)(1) Penalties                                          
               Respondent asks that we impose a penalty against each                  
          petitioner under section 6673(a)(1) in the amount of $25,000.               
               In pertinent part, section 6673(a)(1) provides:                        
               SEC. 6673.  SANCTIONS AND COSTS AWARDED BY COURTS.                     
                    (a) Tax Court Proceedings.--                                      
                         (1) Procedures instituted primarily for                      
                    delay, etc.–-Whenever it appears to the Tax                       
                    Court that--                                                      
                              (A) proceedings before it have been                     
                         instituted or maintained by the taxpayer                     
                         primarily for delay,                                         
                              (B) the taxpayer’s position in such                     
                         proceeding is frivolous or groundless,                       
                              *   *   *   *   *   *   *                               
               the Tax Court, in its decision, may require the                        
               taxpayer to pay to the United States a penalty not in                  
               excess of $25,000.                                                     

               14  Respondent inexplicably based his 1992 sec. 6654                   
          computation for Ms. Martin on tax of $8,764 rather than the                 
          $8,740 amount of tax that appears elsewhere in the notice of                
          deficiency issued to her.  In his 1995 sec. 6654 computation for            
          Ms. Martin, rather than reducing her 1995 tax by the amount of              
          her 1995 earned income credit, respondent improperly treated that           
          credit as a payment of estimated tax.  See sec. 6654(f)(3) and              
          (g)(1).  The correct amounts of those additions to tax shall be             
          the subject of Rule 155 computations.                                       

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