                         T.C. Memo. 2004-141



                       UNITED STATES TAX COURT



                 DANIEL J. SIDES, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 3313-02.                Filed June 17, 2004.


     Daniel J. Sides, pro se.

     Stephen P. Baker, for respondent.



                         MEMORANDUM OPINION


     VASQUEZ, Judge:    Respondent determined a $2,987 deficiency

in and a $327.40 penalty pursuant to section 66621 on

petitioner’s 1999 Federal income tax.    On July 15, 2003,

respondent filed a motion for sanctions under section 6673.



     1
        Unless otherwise indicated, all section references are to
the applicable Internal Revenue Code.
                                - 2 -

     After concessions, the sole issue for decision is whether to

impose a penalty pursuant to section 6673.

Background

     Petitioner is 26 years old.   In the petition, petitioner

made tax protester type arguments.

     At calendar call, petitioner appeared and admitted that he

received income as determined in the notice of deficiency.

Petitioner stated that he realized that the arguments he made in

the petition were inappropriate.   Petitioner conceded that he

owed the deficiency and the section 6662 penalty.

     Petitioner admitted that respondent previously assessed the

section 6702 frivolous return penalty against him.    Petitioner

stated that this was the first time he pursued these arguments in

administrative or legal proceedings.    Petitioner further stated

that he did not intend to make these arguments in the future, he

understood he owed taxes on income he earned and income taxes are

constitutional, and he does not intend to appear in the Court

again.

     Petitioner indicated his willingness to sign a document

attesting to his concessions.   Petitioner promptly signed a

document (stipulation of settlement) that was filed with the

Court at the hearing on the section 6673 penalty.    In the

stipulation of settlement, petitioner agreed that there was a

deficiency of $2,987 and a section 6662 penalty of $327.40 due
                                - 3 -

from petitioner for 1992.    The stipulation of settlement also

provided that the Court may enter a decision for these amounts,

interest will be assessed on the deficiency and penalty, and

petitioner waived the restrictions on assessment and collection

of the deficiency, penalty, and interest.

Discussion

     We consider whether petitioner has engaged in behavior that

warrants imposition of a penalty pursuant to section 6673.

Section 6673(a)(1) authorizes the Tax Court to require a taxpayer

to pay to the United States a penalty not in excess of $25,000

whenever it appears that proceedings have been instituted or

maintained by the taxpayer primarily for delay or that the

taxpayer’s position in such proceeding is frivolous or

groundless.

     Petitioner now admits that his position was frivolous and

groundless.   This was the first time petitioner pursued these

arguments in administrative or legal proceedings.    Petitioner

stated to the Court that he did not intend to make these

arguments in the future or appear in the Court again, and

petitioner understood he owed taxes on income he earned and

income taxes are constitutional.    Petitioner agreed to sign the

stipulation of settlement which listed the amount of deficiency

and addition to tax owed, and petitioner promptly signed the

stipulation of settlement.
                                 - 4 -

     Upon the basis of the facts of this case, we shall not now

impose a penalty pursuant to section 6673(a)(1).       We take this

opportunity, however, to warn petitioner that the Court shall

impose such a penalty if he returns to the Court and proceeds in

a similar fashion in the future.

     To reflect the foregoing,

                                              An appropriate order and

                                         decision will be entered.
