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6654(f). Section 6654(e) provides certain specified exceptions
to the applicability of section 6654, none of which cover
petitioner.
Because we find that petitioner did not file a valid return
for either 1998 or 1999, his “required annual payment” for 1999
was 90 percent of the tax owed for that year. Sec.
6654(d)(1)(B)(i). On the 1999 Form 1040, petitioner admits that
he paid no estimated taxes and that no tax was withheld for that
year. The information returns attached to the 1999 Form 1040
corroborate that no income taxes were withheld from any 1999
payments to petitioner. Therefore, we sustain respondent’s
determination of a section 6654 addition to tax for 1999 subject
to a downward adjustment reflecting respondent’s concessions
eliminating his inclusions of dividend income and capital gain.
III. Respondent’s Motion To Impose a Penalty Under Section
6673(a)(1)
Respondent has moved to impose a penalty against petitioner
under section 6673(a)(1).
In pertinent part, section 6673(a)(1) provides a penalty of
up to $25,000 if proceedings before the Tax Court have been
instituted or maintained by the taxpayer primarily for delay or
the taxpayer’s position in the proceeding is frivolous or
groundless. “The purpose of section 6673 is to compel taxpayers
to think and to conform their conduct to settled principles
before they file returns and litigate.” Takaba v. Commissioner,
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Last modified: November 10, 2007