- 21 -
Each petitioner filed a response to the Court’s order to
show cause. Each argues that the standard for imposition of a
penalty under section 6673 is bad faith and bad faith does not
encompass nonfrivolous arguments. Each catalogs both identical
errors in and defenses to the settlement officer’s determination
that respondent may proceed with his collection actions; viz, (1)
the affirmative defense of statute of limitations, (2) the
imposition of double taxation, or “whipsaw”, (3) an innocent
spouse claim, (4) the presentation of collection alternatives,
including an offer-in-compromise, (5) the settlement officer’s
failure to provide requested documents, and (6) the settlement
officer’s failure to accord him adequate time to perfect his
defense. Each argues that sanctions are not applicable to good
faith efforts by taxpayers and their counsel to reach agreement
with the IRS. Finally, each appears to argue that,
notwithstanding the receipt of a statutory notice of deficiency,
a taxpayer is entitled to raise the underlying tax liability in a
section 6330 hearing.
B. Discussion
Respondent has not asked us to impose a section 6673(a)(1)
penalty on Ms. Davis, in docket Nos. 144-05L and 149-05L, or on
the trustee, in docket No. 145-05L, and we shall not. We shall,
however, impose penalties on Mr. Davis in docket Nos. 146-05L and
147-05L. We shall do so because we believe that Mr. Davis
Page: Previous 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Next
Last modified: November 10, 2007