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C. Conclusion
Taking into account respondent’s position, we shall make
absolute our orders to show cause in these cases and impose on
petitioners in each case a penalty pursuant to section 6673(a)(1)
in the amount of $5,000 (for a total, in all three cases, of
$15,000).
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 counsel 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.
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 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. Respondent implies that counsel
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Last modified: November 10, 2007