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II. Section 6673
Section 6673(a)(1) authorizes this Court to require a
taxpayer to pay to the United States a penalty not to exceed
$25,000 if the taxpayer took frivolous or groundless positions in
the proceedings or instituted the proceedings primarily for
delay. A position maintained by the taxpayer is “frivolous”
where it is “contrary to established law and unsupported by a
reasoned, colorable argument for change in the law.” Coleman v.
Commissioner, 791 F.2d 68, 71 (7th Cir. 1986); see also Hansen v.
Commissioner, 820 F.2d 1464, 1470 (9th Cir. 1987) (section 6673
penalty upheld because taxpayer should have known claim was
frivolous).
Respondent repeatedly warned petitioner that his arguments
are frivolous. Respondent provided petitioner with a copy of
“The Truth About Frivolous Tax Arguments”. Respondent directed
petitioner to, among other things, sections 61 and 72.
Additionally, petitioner is no stranger to this Court. In
docket No. 16886-04, petitioner also argued that distributions
from the Defense Finance and Accounting Service and from the TRW
pension plan for 2000 were not taxable. On December 14, 2005, we
granted summary judgment for respondent in docket No. 16886-04
and entered an order and decision holding, among other things,
that the distributions from the Defense Finance and Accounting
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Last modified: November 10, 2007