William H. Johnston and Nancy S. Johnston - Page 8

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               All of petitioners’ arguments at trial and in documents                
          filed with the Court are frivolous.  Petitioners did not offer              
          any evidence to support their claim that they had business                  
          expenses in the years in issue.  The Court told petitioners that            
          their arguments before and during trial were frivolous and that             
          we would consider imposing a penalty under section 6673 if                  
          petitioners continued to maintain frivolous positions.  Despite             
          this admonition, petitioners continued to make frivolous                    
          arguments in this case.                                                     
               In a prior case, the U.S. Court of Appeals for the Fifth               
          Circuit affirmed the dismissal of petitioners’ bankruptcy claims            
          and admonished petitioners for making allegations that bordered             
          on frivolous, relying on tax-protester rhetoric, and engaging in            
          meritless and time-consuming dealings with the Internal Revenue             
          Service to delay those proceedings.  Johnston v. IRS, 80 AFTR 2d            
          97-7325, 97-2 USTC par. 50,867 (5th Cir. 1997).                             
               We conclude that petitioners maintained these proceedings              
          primarily for delay and that their positions are frivolous.  We             
          conclude that petitioners are liable for a penalty of $5,000                
          under section 6673.                                                         
               Accordingly,                                                           
                                        An appropriate order and decision             
                                   will be entered for respondent in                  
                                   amounts consistent with the foregoing.             






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