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failure to pay estimated taxes for either year. The items of
income identified included wages, interest, and dividends
reported by third-party payors and comprising the unreported
income determined in the notices of deficiency for 2001 and 2002.
The requests for admissions, however, mischaracterized certain
income from sale of stocks and/or bonds as “ordinary income”. At
the time of trial, the parties stipulated to all of the items of
income received by petitioner, and respondent conceded that the
receipts from sale of stocks and/or bonds were capital gains.
However, because petitioner failed to present any information
concerning his holding period or basis in the stocks or bonds
sold, the gross proceeds are includable in petitioner’s income as
short-term capital gains.
Petitioner’s frivolous claims that his income is not subject
to tax were repeated in filings in these cases subsequent to the
petitions, including motions to continue in order to conduct
frivolous discovery, and in his trial memorandum. Petitioner was
warned by respondent and by the Court prior to trial that his
arguments were frivolous and that a penalty might be imposed.
Petitioner persisted in making his frivolous arguments at the
time of trial.
Discussion
Petitioner’s arguments that the items of income that he
received are not taxable have long been recognized as stale,
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Last modified: May 25, 2011