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disputed the penalties during a prior conference with
respondent’s Appeals Office. See Lewis v. Commissioner, supra.
As petitioners have not otherwise had an opportunity to dispute
the imposition of the frivolous return penalties, they may
contest the penalties both at their section 6330 hearing and
before this Court.
D. Whether Respondent Is Entitled to Summary Judgment
Where, as in this case, the validity of the underlying tax
liability is properly at issue, we will review the matter de
novo.6 Sego v. Commissioner, supra at 610; Goza v. Commissioner,
supra at 181. Where the validity of the underlying tax liability
is not properly at issue, however, we will review the
Commissioner’s determination for an abuse of discretion. Sego v.
Commissioner, supra at 610; Goza v. Commissioner, supra at 181.
Respondent assessed a frivolous return penalty for both
petitioners’ 2003 Form 1040 and Form 843. Respondent argues that
“Even if the Court finds that the petitioners may challenge the
frivolous return penalties based on their self-filed returns,
respondent is still entitled to summary judgment.”
6This standard of review comports with the standard of
review used by the U.S. District Courts in sec. 6330 hearings
where the underlying tax liability was a frivolous return
penalty. See, e.g., Yuen v. United States, 290 F. Supp. 2d 1220,
1224 (D. Nev. 2003); Danner v. United States, 208 F. Supp. 2d
1166, 1171 (E.D. Wash. 2002) (citing Sego v. Commissioner, 114
T.C. 604, 610 (2000).
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