Laura K. Davis, et al. - Page 21

                                       - 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