Edward W. Clough - Page 19




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         other matters.  Petitioner's conduct to date as summarized in                
         this opinion demonstrates that petitioner's arguments challenging            
         respondent's collection action with respect to petitioner's                  
         1996-98 liabilities were frivolous and/or groundless.  We shall              
         require petitioner to pay to the United States a penalty under               
         section 6673(a)(1) in the amount of $6,000.                                  
              Our conclusion that it is appropriate to impose a section               
         6673 penalty on petitioner is the direct result of petitioner's              
         arguments.  We believe that our conclusion is warranted even                 
         though we have also held that the Appeals Office abused its                  
         discretion regarding petitioner's 2000 liability.  Our holding               
         regarding the 2000 liability is not the result of any argument               
         that petitioner made.  Rather, it stems from the rather obvious              
         failure of respondent, as shown by the record, to present                    
         verification to the hearing officer that he issued a notice of               
         deficiency for 2000 to petitioner before he assessed the 2000                
         deficiency.  Our authority to impose a section 6673 penalty in               
         this case arises from section 6673(a)(1) and is invoked by                   
         petitioner's frivolous and groundless arguments regarding his                
         1996-98 liabilities.  There is nothing in section 6673(a)(1) to              
         suggest that our authority to impose a section 6673 penalty is               
         constrained in any way by the fact that petitioner was lucky                 
         enough to obtain a favorable ruling regarding respondent's                   
         proposed collection action with respect to the 2000 liability.               







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