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C. Whether Petitioner Is Liable for a Penalty Under Section
6673
In the amendment to answer and at trial, respondent contends
that petitioner is liable for a penalty under section 6673 on the
grounds that petitioner made only frivolous arguments and
instituted these proceedings primarily for delay.
The Court may impose a penalty of up to $25,000 if the
taxpayer’s position or positions are frivolous or groundless or
the proceedings were instituted primarily for delay. Sec.
6673(a)(1)(B). A taxpayer’s position is frivolous or groundless
if it is contrary to established law and unsupported by a
reasoned, colorable argument for change in the law. Coleman v.
Commissioner, 791 F.2d 68, 71 (7th Cir. 1986); Gilligan v.
Commissioner, T.C. Memo. 2004-194. Petitioner took frivolous
positions before and during trial despite ample warnings before
trial from respondent. We conclude that petitioner instituted
and maintained these proceedings primarily for delay. We find
that petitioner is liable for a penalty under section 6673 in the
amount of $2,000.
To reflect the foregoing,
Decision will be
entered under Rule 155.
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Last modified: May 25, 2011