Woodrow Reynolds - Page 11

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          raised frivolous tax protester arguments.  Hence, the Court                 
          concludes that respondent’s determination to proceed with                   
          collection of petitioner’s tax liabilities was not an abuse of              
          discretion, and respondent may proceed with the proposed                    
          collection.                                                                 
          II. Section 6673 Penalty                                                    
               Section 6673(a)(1) authorizes the Tax Court to impose a                
          penalty not in excess of $25,000 on a taxpayer for proceedings              
          instituted primarily for delay or in which the taxpayer’s                   
          position is frivolous or groundless.  “A petition to the Tax                
          Court, or a tax return, is frivolous 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).                                                            
               Respondent warned petitioner about the section 6673(a)(1)              
          penalty in the notice of determination, and the Court warned                
          petitioner at trial that he may be subject to such a penalty if             
          he continued to raise frivolous arguments.  Although respondent             
          has not asked the Court to impose a penalty pursuant to section             
          6673(a)(1), the Court may sua sponte impose such a penalty                  
          against a taxpayer.  Pierson v. Commissioner, 115 T.C. 576, 580-            
          581 (2000).  The Court is convinced that petitioner’s position is           
          frivolous and made for delay because it is based on tax-protester           
          rhetoric, which has been rejected by this Court and many others.            






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