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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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Last modified: March 27, 2008