-11- 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.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 NextLast modified: November 10, 2007