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portion of the underpayment in either year was not attributable
to fraud. Therefore, we will sustain in full respondent’s
determinations of fraud for both years.
Section 6673 Penalty
We note that section 6673(a)(1) authorizes the Court to
require a taxpayer who has instituted or maintained a proceeding
primarily for delay, or whose position is frivolous or
groundless, to pay a penalty to the United States. See Williams
v. Commissioner, 119 T.C. 276, 280-281 (2002); Bagby v.
Commissioner, 102 T.C. 596, 614 (1994); Stamos v. Commissioner,
95 T.C. 624, 638 (1990), affd. without published opinion 956 F.2d
1168 (9th Cir. 1992). The Court may consider the imposition of
such a penalty sua sponte. See, e.g., Jones v. Commissioner,
T.C. Memo. 2003-131; Hawes v. Commissioner, T.C. Memo. 1999-152;
Bierhaalder v. Commissioner, T.C. Memo. 1993-164, affd. without
published opinion 16 F.3d 415 (10th Cir. 1994).
As our previous discussion indicates, petitioner’s failure
to engage in any meaningful pretrial preparation, his failure to
appear for trial, and his other efforts to protract this
proceeding are evidence that he instituted and maintained it
primarily for delay. Respondent has not sought a penalty under
section 6673(a)(1), however, and we will not impose one in these
circumstances. Petitioner is nonetheless cautioned that should
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