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IV. Section 6673 Penalty
We now consider whether petitioner should be held liable for
a penalty under section 6673. We take this opportunity to warn
petitioner that we are authorized to impose a penalty of up to
$25,000 on a taxpayer if the Court finds, among other things,
that the taxpayer’s position in proceedings is frivolous or
groundless. A taxpayer’s position is frivolous if it is contrary
to established law and unsupported by a reasoned, colorable
argument for change in the law.6 See Coleman v. Commissioner,
791 F.2d 68, 71 (7th Cir. 1986); see also Hansen v. Commissioner,
820 F.2d 1464, 1470 (9th Cir. 1987); Nis Family Trust v.
Commissioner, 115 T.C. 523, 544 (2000).
The purpose of section 6673 is to compel taxpayers to think
and conform their conduct to settled tax principles. Coleman v.
Commissioner, supra; see also Takaba v. Commissioner, 119 T.C.
285, 295 (2002). The section is a penalty provision intended to
deter and penalize frivolous claims and positions in proceedings
before this Court.
Petitioner makes numerous frivolous arguments on brief.
Petitioner asserts that none of his income is taxable, arguing
that wages are not income and no person is liable for income tax.
Though we do not impose a penalty here, nor does respondent ask
us to impose a section 6673 penalty, we caution petitioner that
should he bring similar arguments before this Court in the
6We have jurisdiction to hear the case notwithstanding that
we find petitioner’s arguments frivolous. Petitioner’s
assertions to the contrary are incorrect.
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