- 39 -
penalty on petitioners under section 6673(a)(1), the Court will
sua sponte determine whether to impose such a penalty. 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 primarily for delay, sec.
6673(a)(1)(A), or that the taxpayers’ position 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
imposition of a penalty under section 6673(a)(1) 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 actions. The Court’s May 29, 2003 Order
reminded petitioners about section 6673(a)(1). Before the trial
in this case began, the Court again reminded petitioners about
section 6673(a)(1) and indicated that if petitioners advanced
frivolous and/or groundless arguments at trial, the Court would
impose a penalty on them under that section. During the trial,
upon questioning by the Court, Mr. Frey indicated that
petitioners continue to adhere to the statements, contentions,
arguments, requests, and questions set forth in petitioners’
attachment to petitioners’ 1996 Form 1040 and petitioners
Page: Previous 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 NextLast modified: May 25, 2011