- 10 -
(6th Cir. 1991). Therefore, we find that petitioner is liable
for a fraud penalty under section 6663(a) of $128,867.8
III. Penalty Under Section 6673(a)(1)(C)
Section 6673(a)(1)(C) authorizes the Court to require a
taxpayer to pay the United States a penalty in an amount not to
exceed $25,000 whenever it appears to the Court that the taxpayer
unreasonably failed to pursue available administrative remedies.
A penalty under section 6673(a)(1)(C) may be appropriate if a
taxpayer fails to comply with the Commissioner’s requests for
records made prior to trial when, had he produced those records
when requested, there would have been fewer disputed issues at
the commencement of trial. See Suri v. Commissioner, T.C. Memo.
2004-71 ($1,000 penalty imposed where the taxpayer repeatedly
failed to meet with respondent’s counsel or provide relevant
information that ultimately led to the settlement of various
items of income), affd. 96 AFTR 2d 2005-6526 (2d Cir. 2005);
Edwards v. Commissioner, T.C. Memo. 2003-149 ($24,000 penalty
imposed where the taxpayer took frivolous and groundless
positions and unreasonably failed to pursue available
administrative remedies), affd. 119 Fed. Appx. 293 (D.C. Cir.
2005). A penalty is also appropriate under section 6673(a)(1)(C)
8 $171,823 (deficiency/underpayment) x 0.75 = $128,867.25.
Because we find petitioner to be liable for a fraud penalty under
sec. 6663(a), we need not determine whether petitioner is liable
for an accuracy-related penalty under section 6662(a).
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