Laura K. Davis, et al. - Page 26

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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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