John R. Forrest - Page 9

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          T.C. 365, 372-373 (2002), affd. 329 F.3d 1224 (11th Cir. 2003);             
          Pierson v. Commissioner, 115 T.C. 576, 581 (2000).  Petitioner's            
          argument that the Federal income tax is unconstitutional because            
          the 16th Amendment violates the 10th amendment is patently                  
          frivolous,3 and all other arguments he raised at various points             
          in the proceeding are similarly groundless.  He was expressly               
          warned in the notice of determination that his constitutional               
          argument was groundless and might result in a penalty under                 
          section 6673 in any Tax Court proceeding.  He persisted with the            
          argument throughout this proceeding, even after respondent's                
          counsel provided him with authority holding the argument                    
          groundless.  Moreover, petitioner previously received a $500                
          penalty under section 6673(a)(1) for making groundless arguments            
          in the deficiency proceeding covering the liabilities at issue              
          herein.                                                                     
               Petitioner's groundless arguments and contumacious conduct             
          have wasted the time and resources of respondent and this Court.            
          While a more substantial penalty may be warranted, we shall                 
          impose a penalty pursuant to section 6673(a)(1) of $2,500, in               
          light of the relatively modest size of the liabilities at issue.            
          Petitioner is hereby warned, however, that should he advance                
          frivolous or groundless arguments in this Court in the future,              


               3 See, e.g., Harrell v. Commissioner, 191 F.3d 456 (7th Cir.           
          1999), affg. without published opinion T.C. Memo. 1998-207.                 





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