- 10 - file a tax return and, consequently, did not elect to itemize deductions), affd. per curiam __ Fed. Appx. ___ (3d Cir., July 21, 2005); Andreas v. Commissioner, T.C. Memo. 1993-551 (section 63 and the relevant regulations do not authorize the election to itemize deductions unless a return is filed). Section 6673 Penalty We now address whether to impose a penalty against petitioner pursuant to section 6673, which authorizes the Tax Court to impose a penalty up to $25,000 on a taxpayer if the Court finds, among other things, that the taxpayer instituted or maintained proceedings primarily for delay or that the taxpayer’s position in such proceedings is frivolous or groundless. A taxpayer’s position is frivolous if it is contrary to established law and unsupported by a reasoned, colorable argument for change in the law. See Coleman v. Commissioner, 791 F.2d 68, 71 (7th Cir. 1986); see also Hansen v. Commissioner, 820 F.2d 1464, 1470 (9th Cir. 1987); Nis Family Trust v. Commissioner, 115 T.C. 523, 544 (2000). Petitioner does not here argue for any change in the law. Instead, petitioner argues that the tax laws do not apply to him. Petitioner’s arguments are frivolous. Petitioner deserves a penalty under section 6673(a)(1), and that penalty should be substantial, if it is to have the desired deterrent effect. Cf. Talmage v. Commissioner, T.C. Memo. 1996-114, affd. without published opinion 101 F.3d 695 (4th Cir. 1996). The purpose of section 6673 is to compel taxpayers to think and to conform theirPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
Last modified: May 25, 2011