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involving Mr. Davis, and impose on him in each docket number a
penalty pursuant to section 6673(a)(1) in the amount of $7,500.
III. Section 6673(a)(2) Liability of Counsel for Excessive Costs
A. Positions of the Parties
Respondent’s position is that we should impose excess costs
on Mr. Jones and Ms. Lacorte pursuant to section 6673(a)(2).
Respondent argues that, on behalf of their clients, counsel made
only frivolous arguments and advanced only groundless claims, and
they did so knowingly or, at least, recklessly. Respondent
claims that at no point in these proceedings have they shown the
merit of any argument or claim made by them on behalf of
petitioners. In particular, respondent focuses on Mr. Jones’s
perseverance in challenging petitioners’ underlying tax
liabilities notwithstanding the clear language of section
6330(c)(2)(B) prohibiting such challenges to taxpayers who have
received notices of deficiency and the well-defined caselaw
interpreting that section. Respondent finds especially egregious
Mr. Jones’s challenge of Mr. Davis’s underlying tax liabilities
for 1997 and 1998 in docket No. 146-05L since those liabilities
had been finally determined by this Court in a deficiency
proceeding. Respondent notes that the motions to amend petitions
were filed less than 2 months before the start of the Las Vegas
trial session, and the amended petitions contain only additional
claims that were all determined to be meritless by the Court.
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Last modified: November 10, 2007