Charles Mandeville - Page 14




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          petitioner did not file a return for the preceding taxable year,            
          2000, respondent has met his burden of producing evidence that              
          petitioner had a required annual payment of estimated tax for               
          2001 payable in four installments under section 6654(d)(1)(B)(i)            
          and the Court need not engage in any analysis under section                 
          6654(d)(1)(B)(ii).                                                          
               The Court also concludes that petitioner does not fit                  
          within any of the exceptions listed in section 6654(e).11  As a             
          consequence, the Court sustains respondent’s determination of the           
          addition to tax pursuant to section 6654(a).                                
          D.  Section 6673(a)(1) Penalty                                              
               Section 6673(a)(1) authorizes the Tax Court to impose a                
          penalty not in excess of $25,000 on a taxpayer for proceedings              
          instituted primarily for delay or in which the taxpayer’s                   
          position is frivolous or groundless.  “A position maintained by             
          the taxpayer is ‘frivolous’ where it is ‘contrary to established            


               11 Sec. 6654(e) provides two exceptions to the sec. 6654(a)            
          addition to tax.  First, the addition is not applicable if the              
          tax shown on the taxpayer’s return for the year in question (or,            
          if no return is filed, the taxpayer’s tax for that year), reduced           
          for these purposes by any allowable credit for wage withholding,            
          is less than $1,000.  Sec. 6654(e)(1).  Second, the addition is             
          not applicable if the taxpayer’s tax for the full 12 month                  
          preceding taxable year was zero and the taxpayer was a citizen or           
          resident of the United States.  Sec. 6654(e)(2).  The Court has             
          determined that petitioner had a liability for a Federal income             
          tax deficiency for 2001 that net of withholding exceeds $1,000.             
          And, in light of our earlier conclusion regarding petitioner’s              
          liability for a deficiency for 2000, it has not been shown that             
          petitioner had no tax liability in 2000.                                    






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