                                T.C. Memo. 2013-12



                          UNITED STATES TAX COURT



                  LAUREL ANN CURTIS, Petitioner v.
           COMMISSIONER OF INTERNAL REVENUE, Respondent



      Docket No. 5657-10.                            Filed January 14, 2013.



      Laurel Ann Curtis, pro se.1

      Kimberly L. Clark and Aimee R. Lobo-Berg, for respondent.




      1
        Petitioner was represented by counsel Ronald H. Hoevet throughout the
pretrial proceedings. When petitioner’s case was called for trial, however, Mr.
Hoevet moved for leave to withdraw as counsel on grounds that he could not “assert
a position unless there is a basis of law and fact for doing so that is not frivolous.”
Respondent did not object to this motion, which the Court granted.
                                          -2-

[*2]           MEMORANDUM FINDINGS OF FACT AND OPINION


       THORNTON, Chief Judge: Respondent determined the following

deficiencies in and additions to petitioner’s Federal income tax:2

                                                       Additions to tax
                                            Sec.                Sec.               Sec.
       Year         Deficiency            6651(f)            6651(a)(2)1           6654

       1994         $13,579               $9,845                $3,395            $700
       1995          12,568                9,112                 3,142             686
       1996         191,576              138,893                47,894           10,197
       1997         161,180              116,856                40,295            8,683
       19982         23,716               17,194                 5,929            1,076
       1
         On brief respondent conceded that petitioner is not liable for additions to tax
under sec. 6651(a)(2) for taxable years 1994 through 1997.
       2
         In his answer respondent conceded that there is no deficiency or addition to
tax for tax year 1998.

       The issues for decision are: (1) whether petitioner is required to include in

income certain amounts she received as rental income during tax years 1994, 1995,

and 19963; (2) whether petitioner is required to include in income certain

       2
       Unless otherwise indicated, all section references are to the Internal Revenue
Code in effect for the relevant taxable years, and all Rule references are to the Tax
Court Rules of Practice and Procedure. Monetary amounts are rounded to the
nearest dollar.
       3
        In the stipulation of settled issues the parties agreed to the amounts of
rental income petitioner received during tax years 1994 through 1997. In agreeing
to these amounts, respondent conceded that petitioner did not receive rental
                                                                          (continued...)
                                          -3-

[*3] amounts she received as capital gain income from the sale of real property

during tax years 1996 and 19974; (3) whether petitioner’s failure to file Federal

income tax returns for the tax years 1994 through 1997 (years at issue) was

fraudulent within the meaning of section 6651(f);5 (4) whether the section 6654

addition to tax applies to petitioner’s failure to pay estimated taxes for the years at

issue; and (5) whether the Court should impose a penalty on petitioner under section

6673(a)(1).




      3
       (...continued)
income of $16,233, $15,533, $15,589, and $37,268 for tax years 1994, 1995,
1996, and 1997, respectively, as determined in the notice of deficiency.
      4
        In the stipulation of settled issues the parties agreed to the amount of net
capital gain income petitioner received from the sale of real property during tax
years 1996 and 1997. In agreeing to these amounts, respondent conceded that
petitioner did not receive $106,900 in capital gain income during tax year 1997, as
determined in the notice of deficiency.
      5
        Respondent argues that if the Court does not find petitioner liable for the
addition to tax pursuant to sec. 6651(f) for the years at issue, the Court should find
petitioner liable in the alternative for the sec. 6651(a)(1) addition to tax for the years
at issue.
                                          -4-

[*4]                            FINDINGS OF FACT

       The parties have stipulated some facts, which we find accordingly.6 The

stipulation of facts together with the attached exhibits is incorporated herein by this

reference. When she filed her petition, petitioner lived in Oregon.

Real Estate Activities

       During the years at issue petitioner owned rental properties in Portland,

Oregon. Petitioner rented these properties and received rental income from tenants.

During 1996 and 1997 petitioner sold some of the properties. She received income

from her real estate activities as follows:




       6
        At trial petitioner stated that she wanted to “challenge some of the figures
and statements in the stipulated facts” because she signed the stipulation of facts
without having “the information in order to act appropriately.” Stipulations are
generally treated as “conclusive admissions”. Rule 91(e). We may disregard
stipulations where justice so requires if the evidence contrary to the stipulation is
substantial or the stipulation is clearly contrary to the facts disclosed by the record.
Cal-Maine Foods, Inc. v. Commissioner, 93 T.C. 181, 195 (1989); see Loftin &
Woodward, Inc. v. United States, 577 F.2d 1206, 1232 (5th Cir. 1978); Jasionowski
v. Commissioner, 66 T.C. 312, 317-318 (1976). Petitioner did not specify the
stipulations with which she disagreed and did not address the issue on brief.
Accordingly, we do not set aside the stipulations because petitioner presented no
evidence contrary to them and because we treat petitioner’s failure to address the
issue on brief, in effect, as a concession. See Rule 151(e)(4) and (5); Sundstrand
Corp. & Subs. v. Commissioner, 96 T.C. 226, 344 (1991).
                                         -5-

[*5]         Year          Net Rents Received1        Net Capital Gains Received
             1994               $48,700                              -0-
             1995                46,600                              -0-
                                                                2
             1996                46,767                           $477,000
                                                                  3
             1997                  -0-                              320,000

       1
         These amounts reflect respondent’s concessions discussed supra note 3.
       2
         In 1996 petitioner received $249,000 in net capital gains from the sale of real
property at 1412-1418 SE 23rd Ave., in Portland, Or. and $228,000 in net capital
gains from the sale of real property at 2312 SE Madison St., Portland, Or.
       3
         This amount reflects respondent’s concession, as discussed supra note 4.
Petitioner received $320,000 in net capital gains from the sale of real property at
1622 SE 32nd Pl., in Portland, Or.

Tax-Protester Activities and First Tax Court Case

       In the early 1980s after attending a seminar by Irwin Schiff and reading one

of his books petitioner decided to stop filing Federal income tax returns.7 She has

not filed a Federal income tax return since 1983.

       7
        Irwin Schiff is the author of several publications, including The Biggest Con:
How the Government is Fleecing You (1976); How Anyone Can Stop Paying
Income Taxes (1982); and The Federal Mafia: How It Illegally Imposes and
Unlawfully Collects Income Taxes (1990). His activities in protest of the tax laws
are well known to this Court. See, e.g., Carrillo v. Commissioner, T.C. Memo.
2005-290; Schiff v. Commissioner, T.C. Memo. 1992-183. Schiff has been
convicted of numerous tax-related crimes, including conspiracy to defraud the
Government for the purpose of impeding and impairing the Internal Revenue
Service, assisting in the preparation of false income tax returns, tax evasion, and
filing false income tax returns. See United States v. Cohen, 510 F.3d 1114, 1117
n.2 (9th Cir. 2007).

       In 1996 Mr. Schiff incorporated Freedom Foundation, Inc., in Nevada to
propagate his views concerning the voluntary nature of the income tax. Petitioner
was listed as the treasurer of Freedom Foundation, Inc., from 1996 through 1999.
                                         -6-

[*6] On June 22, 1995, after respondent sent her notices of deficiency for tax

years 1983 through 1993, petitioner filed a petition in this Court.8 Mr. Schiff

assisted her in preparing for her first Tax Court case, and she unsuccessfully

attempted to call him as an expert witness during the trial. At the time, petitioner

was aware that Mr. Schiff had previously been convicted, fined, and imprisoned

for willfully failing to file Federal income tax returns. On October 28, 1996, this

Court issued its opinion in petitioner’s first Tax Court case, sustaining the

Commissioner’s determination that rents petitioner had received were taxable

income to her and that she was liable for additions to tax under sections 6651(a)(1)

and 6654(a). Curtis v. Commissioner, T.C. Memo. 1996-484, rev’d and remanded

without published opinion, 232 F.3d 893 (9th Cir. 2000). The Court also imposed




      8
        Petitioner also filed a complaint regarding tax years 1983 through 1993 with
the Oregon Tax Court. On June 30, 2004, the Oregon Tax Court issued its opinion
in that case, finding that rental income petitioner received was taxable by the State.
The court also awarded the Oregon Department of Revenue $5,000 in damages, as
well as attorney’s fees because it found that “[t]here is no objectively reasonable
basis for * * * [petitioner’s] legal positions.” Curtis v. Dep’t of Revenue, 17 Or.
Tax 414, 424-425 (Or. T.C. 2004). On June 3, 2005, the Supreme Court of Oregon
affirmed the decision. Curtis v. Dep’t of Revenue, 112 P.3d 330 (Or. 2005).
                                        -7-

[*7] a $15,000 penalty on petitioner pursuant to section 6673(a), having found that

she “never substantively addressed the pertinent issues” in her case but instead

“asserted absurd, discredited, and misguided tax-protester arguments”. Id.9

      After her first Tax Court case, petitioner continued to espouse her tax-

protester beliefs. On April 15, 1998, she handed out antitax documents at a post

office in Portland, Oregon. In 1999 she wrote a book entitled “IRS Exposed:

Bullies, Liars, Thieves, The True Account of How One Woman Fought the

Shameful Abuse of the IRS and Won”. The documents and the book advanced

petitioner’s view regarding the voluntary nature of the income tax system and

encouraged readers not to file Federal income tax returns.




      9
        On appeal, the U.S. Court of Appeals for the Ninth Circuit remanded the
case for clarification as to the evidence this Court relied upon in its findings
regarding the amounts of petitioner’s unreported income. See Curtis v.
Commissioner, 232 F.3d 893 (9th Cir. 2000), rev’g and remanding T.C. Memo.
1996-484. On remand, this Court reentered its original order and decision. See
Curtis v. Commissioner, T.C. Memo. 2001-308, aff’d in part and rev’d in part, 73
Fed. Appx. 200 (9th Cir. 2003). Petitioner appealed that decision to the Court of
Appeals for the Ninth Circuit, which affirmed most of this Court’s findings,
including the imposition of the sec. 6673(a) penalty, and reversed and remanded the
case for clarification of a discrepancy regarding one of the tax years. See Curtis v.
Commissioner, 73 Fed. Appx. 200. On August 19, 2004, we entered a decision in
that case.
                                         -8-

[*8] Audit for the Years at Issue

      In April 1998 respondent contacted petitioner and requested that she provide

bank records, business records, and other materials that would be relevant in

determining her income for the years 1994 through 1998. The following month

petitioner met with respondent’s revenue agent but did not provide the requested

documents. Instead, she argued with the revenue agent and questioned her

authority. On June 19, 2001, petitioner met with respondent’s revenue agent and

the revenue agent’s manager but again provided no documents. At this second

meeting, petitioner again argued with the revenue agent and questioned her

authority.

      Because petitioner did not provide the requested documentation, respondent’s

revenue agent summoned banks and other third parties in an attempt to reconstruct

petitioner’s income. The summonses indicated that petitioner had rental income and

property sales income during the years 1994 through 1998. Respondent then

prepared substitutes for returns (SFRs) on petitioner’s behalf pursuant to section

6020(b).
                                          -9-

[*9]                                   OPINION

I. Statute of Limitations

       Petitioner argues that the limitations periods for assessing her tax for the

years at issue have expired. Petitioner is mistaken. The limitations period on

assessment begins to run only after a taxpayer files a return. See sec. 6501(a);

McCormack v. Commissioner, T.C. Memo. 2009-233. If a taxpayer does not file a

return, then “the tax may be assessed, or a proceeding in court for the collection of

such tax may be begun without assessment, at any time.” Sec. 6501(c)(3). SFRs

prepared by the Commissioner do not start the running of the period of limitations

on assessment and collection. Sec. 6501(b)(3). Petitioner did not file Federal

income tax returns for the years at issue. Accordingly, the periods of limitation on

assessment and collection have not expired.

II. Petitioner’s Unreported Income

       The Commissioner’s determinations in a notice of deficiency are generally

presumed correct, and the taxpayer bears the burden of proving that those

determinations are incorrect.10 Rule 142(a)(1).

       10
        Although sec. 7491 may shift the burden to the Commissioner in certain
circumstances, the section is applicable only to court proceedings that arise in
connection with examinations commencing after July 22, 1998. See Williams v.
Commissioner, 123 T.C. 144, 146 n.3 (2004); Nis Family Trust v. Commissioner,
                                                                        (continued...)
                                         - 10 -

[*10] Petitioner did not file Federal income tax returns for the years at issue and

stipulated that she received income from rents and capital gains during those years.

Therefore, respondent has met his burden of establishing an evidentiary foundation

showing that petitioner received unreported income. See Edwards v.

Commissioner, 680 F.2d 1268, 1270 (9th Cir. 1982); Weimerskirch v.

Commissioner, 596 F.2d 358 (9th Cir. 1979), rev’g 67 T.C. 672 (1977). Gross

income includes all income from whatever source derived, including rental income

and gains from dealings in property. Sec. 61(a)(3), (5). Petitioner stipulated that

she received the income but asserts, using arguments that this Court has long

deemed frivolous, that the income was not taxable income within the meaning of the

law.11 Petitioner failed to show that the income was not taxable or that she

      10
        (...continued)
115 T.C. 523, 537 (2000). The examination in this case commenced in April 1998;
therefore, sec. 7491 is not applicable.
      11
         Petitioner offers numerous arguments generally objecting to the imposition
of an income tax, including: (1) there can be no deficiency unless a return was
filed; (2) the Commissioner has no authority to assess an estimated tax unless it is
a tax payable by stamp; (3) only corporate entities can have income under sec. 61;
(4) respondent is not legally authorized to prepare a substitute for return; (5) real
estate rents are not subject to the income tax authorized by the Sixteenth
Amendment; and (6) no U.S. citizen is statutorily liable for an income tax.
Petitioner’s meritless arguments have repeatedly been rejected by this and other
courts. See, e.g., Wilcox v. Commissioner, 848 F.2d 1007, 1008 (9th Cir. 1988),
aff’g T.C. Memo. 1987-225; Carter v. Commissioner, 784 F.2d 1006, 1009 (9th
                                                                         (continued...)
                                        - 11 -

[*11] received any less than the amounts stipulated during the years at issue.

Accordingly, we sustain respondent’s adjustment in those amounts.12

III. Additions to Tax and Penalties

      A. Section 6651(f) Failure To File Addition to Tax

      Petitioner did not file Federal income tax returns or pay income tax,

including estimated tax, for 1994 through 1998. Respondent determined that

      11
        (...continued)
Cir. 1986); Charczuk v. Commissioner, 771 F.2d 471 (10th Cir. 1985), aff’g T.C.
Memo. 1983-433; Wnuck v. Commissioner, 136 T.C. 498 (2011); Lawson v.
Commissioner, T.C. Memo. 2009-147; Turner v. Commissioner, T.C. Memo. 2004-
251. We shall not painstakingly address petitioner’s assertions “with somber
reasoning and copious citation of precedent; to do so might suggest that these
arguments have some colorable merit.” See Crain v. Commissioner, 737 F.2d 1417,
1417 (5th Cir. 1984).
      12
         Petitioner’s argument that the SFRs respondent prepared are invalid because
respondent failed to comply with sec. 6020(b) is meritless. Sec. 6020(b) allows the
Secretary (or other authorized internal revenue officer or employee) to prepare a
return “from his own knowledge and from such information as he can obtain through
testimony or otherwise.” See also sec. 301.6020-1(a)(1), Proced. & Admin. Regs.
The regulations provide that a substitute for return is valid if it “identifies the
taxpayer by name and taxpayer identification number, contains sufficient
information from which to compute the taxpayer’s tax liability, and purports to be a
return.” Sec. 301.6020-1(b)(2), Proced. & Admin. Regs. Additionally, the return
must be signed by an internal revenue officer or employee to signify that the officer
or employee has “adopted the document as a return for the taxpayer.” Id. The
SFRs respondent prepared are valid under the regulations. See Malone v.
Commissioner, T.C. Memo. 1998-372 (finding that taxpayers failed to state a claim
upon which relief could be granted when they argued that SFRs not signed by
taxpayers were invalid).
                                          - 12 -

[*12] petitioner’s failure to file was fraudulent and that she is liable for section

6651(f) additions to tax.13 Respondent must establish by clear and convincing

evidence that petitioner’s failure to file was an intentional attempt to evade tax

known to be owing. See sec. 7454(a); Rule 142(b); Maciel v. Commissioner, 489

F.3d 1018, 1026 (9th Cir. 2007), aff’g in part, rev’g in part T.C. Memo. 2004-28;

Estate of Trompeter v. Commissioner, 279 F.3d 767, 773 (9th Cir. 2002), vacating

and remanding 111 T.C. 57 (1998); Conforte v. Commissioner, 692 F.2d 587, 592

(9th Cir. 1982), aff’g in part, rev’g in part 74 T.C. 1160 (1980).

      In deciding whether a failure to file is fraudulent under section 6651(f), we

consider the same elements that are considered in imposing the addition to tax for

fraud under section 6663 and former section 6653(b). Clayton v. Commissioner,

102 T.C. 632, 653 (1994). Those elements are: (1) the existence of an

underpayment and (2) fraudulent intent with respect to some portion of the

underpayment. See Petzoldt v. Commissioner, 92 T.C. 661, 698-699 (1989).

There is no question that petitioner has an underpayment for each year at issue

since she stipulated, and we determined, that she had taxable income during the

years at issue but failed to pay tax for any of those years. Further, petitioner does

      13
        As previously noted, respondent has conceded that petitioner has no
deficiency and is not liable for additions to tax for 1998.
                                         - 13 -

[*13] not argue that she is entitled to any credits or deductions for the years at issue

that would negate any underpayment.

      Fraudulent intent is a question of fact that must be considered on the basis of

an examination of the record and the taxpayer’s course of conduct, drawing

reasonable inferences therefrom. Spies v. United States, 317 U.S. 492, 499 (1943);

Petzoldt v. Commissioner, 92 T.C. at 699. Because fraudulent intent can seldom be

established by direct proof, it may be proved by circumstantial evidence. See

Clayton v. Commissioner, 102 T.C. at 647; Petzoldt v. Commissioner, 92 T.C. at

700. Thus, intent to defraud may be inferred from any conduct the likely effect of

which would be to conceal, mislead, or otherwise prevent the collection of taxes

believed to be owing. Spies, 317 U.S. at 499.

      Courts look to a nonexclusive list of factors, or “badges of fraud”, to

determine whether fraudulent intent exists. Niedringhaus v. Commissioner, 99

T.C. 202, 211 (1992). They include: (1) failure to file income tax returns; (2)

failure to maintain adequate records; (3) failure to cooperate with tax authorities;

(4) assertion of frivolous arguments and objections to the tax laws; (5) lack of

credibility in testimony; (6) failure to make estimated tax payments; (7)

understatement of income; and (8) concealment of income. See Laurins v.

Commissioner, 889 F.2d 910, 913 (9th Cir. 1989), aff’g Norman v. Commissioner,
                                         - 14 -

[*14] T.C. Memo. 1987-265; Bradford v. Commissioner, 796 F.2d 303, 307-308

(9th Cir. 1986), aff’g T.C. Memo. 1984-601; Recklitis v. Commissioner, 91 T.C.

874, 910 (1988). No single factor is determinative of fraud; however, the existence

of several indicia may constitute persuasive circumstantial evidence of fraud.

Niedringhaus v. Commissioner, 99 T.C. at 211; Petzoldt v. Commissioner, 92 T.C.

at 700. The taxpayer’s background and the context of the events in question may

also be considered circumstantial evidence of fraud. Spies, 317 U.S. at 497;

Plunkett v. Commissioner, 465 F.2d 299, 303 (7th Cir. 1972), aff’g T.C. Memo.

1970-274. We address the badges of fraud individually.

             1. Failure To File Income Tax Returns

      Petitioner did not file Federal income tax returns for the years at issue and has

an extended history of not filing returns, dating back to 1983. Considering the

extent of her communication with various taxing authorities and her involvement in

prior Tax Court litigation, it is clear that petitioner knew that her income was

taxable and that she had a requirement to file income tax returns. Petitioner’s

argument and testimony that she believed she should not have to file returns are

irrelevant. A belief that the tax laws are unconstitutional and should not apply is not

a sufficient defense to fraud. Niedringhaus v. Commissioner, 99 T.C. at 219
                                        - 15 -

[*15] (citing Cheek v. United States, 498 U.S. 192, 205-206 (1991)). This factor

weighs heavily against petitioner.

             2. Failure To Maintain Adequate Records

      Petitioner failed to maintain books and records to document her income

during the years at issue. Petitioner argues that she did not keep records because

she “never received any notice from the Secretary or his delegate either to keep

records or to file a return.” Taxpayers are required to maintain sufficient records to

allow the Commissioner to determine their correct Federal income tax liabilities.

Sec. 6001. Petitioner’s argument that she did not keep records because she did not

receive notice is specious, and her failure to maintain books and records is evidence

of fraudulent intent.

             3. Failure To Cooperate With Tax Authorities

      Petitioner failed to comply with respondent’s multiple requests to provide

books and records or otherwise cooperate with respondent. During the course of

her audit, petitioner argued with respondent’s revenue agent and raised frivolous

arguments regarding the agent’s authority. Petitioner’s refusal to cooperate

prolonged her audit, as respondent was forced to summon bank and title

companies to obtain information about her income. Failure to cooperate with

revenue agents during an audit indicates an intention to evade the payment of tax.
                                         - 16 -

[*16] See Baumgardner v. Commissioner, 251 F.2d 311, 323 (9th Cir. 1957), aff’g

T.C. Memo. 1956-112; Prof’l Servs. v. Commissioner, 79 T.C. 888, 933 (1982);

Temple v. Commissioner, T.C. Memo. 2000-337, aff’d, 62 Fed. Appx. 605 (6th Cir.

2003). Accordingly, this factor weighs against petitioner.

             4. Assertion of Frivolous Arguments and Objection to the Tax Laws

      As discussed above, petitioner asserted arguments that have long been

deemed frivolous, irrelevant, and otherwise totally lacking in merit. Such

arguments, coupled with affirmative acts designed to evade Federal income tax,

support a finding of fraud. See Mooney v. Commissioner, T.C. Memo. 2011-35;

Chase v. Commissioner, T.C. Memo. 2004-142; Houser v. Commissioner, T.C.

Memo. 2000-111. Petitioner’s continued assertion of frivolous arguments, her

association with known tax protesters such as Irwin Schiff, her failure to file returns

since 1983, and her activities to encourage others to adopt her tax-protester beliefs

demonstrate a clear intent to evade the assessment and collection of tax. This factor

weighs heavily against petitioner.

             5. Lack of Credibility in Testimony

      Petitioner asserted only frivolous arguments at trial. This factor weighs

against petitioner. See Laurins v. Commissioner, 889 F.2d at 913.
                                          - 17 -

[*17]         6. Failure To Make Estimated Tax Payments

        Petitioner made no estimated tax payments for the years at issue. This factor

weighs against petitioner. See Bradford v. Commssioner, 796 F.2d at 307-308.

              7. Understatement of Income

        Petitioner failed to report taxable income for the four years at issue and has

not filed a Federal income tax return since 1983. She stipulated, however, that she

received significant rental and capital gains income during the years at issue.

Consistent failure to report substantial amounts of income over a number of years is

highly persuasive evidence of fraudulent intent. See Temple v. Commissioner, T.C.

Memo. 2000-337. This factor weighs heavily against petitioner.

              8. Concealment of Income

        Respondent argues that, following her first Tax Court case, petitioner sold

many of her rental properties for cash and transferred others to a partnership that she

controlled in order to conceal her assets and financial affairs from respondent.

Petitioner counters that she formed the partnership on the advice of an attorney for

estate planning reasons and that she sold the properties because her failing health

prevented her from being able to maintain them. We need not and do not decide

this issue because even if it were favorable to petitioner, the other factors
                                          - 18 -

[*18] discussed above are clearly sufficient to establish fraud without regard to

whether she concealed income.

             9. Conclusion

      Considering all the facts and circumstances, we conclude that the record

shows by clear and convincing evidence that petitioner understated her income and

that her failure to file returns was fraudulent. We hold that petitioner is liable for

additions to tax under section 6651(f) for the taxable years at issue.

      B. Section 6654(a) Failure To Pay Estimated Tax Addition to Tax

      Section 6654(a) imposes an addition to tax “in the case of any underpayment

of estimated tax by an individual”. A taxpayer generally has an obligation to pay

estimated income tax for a particular year only if he or she has a required annual

payment for that year. Sec. 6654(d).

      Petitioner’s frivolous challenges to her obligation to pay tax do not

specifically address any issue regarding this addition to tax. In addition, we have

sustained respondent’s determination that petitioner had a Federal income tax

liability for each of the years at issue, and she does not dispute that she failed to

make estimated tax payments for the years at issue. Petitioner also neither argued

nor established any of the defenses enumerated in section 6654(e).
                                        - 19 -

[*19] We deem petitioner to have conceded this issue and sustain respondent’s

determination as to the additions to tax under section 6654(a). See Holmes v.

Commissioner, T.C. Memo. 2010-42.

      C. Section 6673(a)(1) Penalty

      Respondent has moved for a penalty under section 6673(a)(1), which

authorizes the Court to impose a penalty of up to $25,000 if the taxpayer took

frivolous or groundless positions in the proceeding, instituted or maintained the

proceeding primarily for delay, or unreasonably failed to pursue available

administrative remedies.

      Petitioner has based her entire case on frivolous and groundless positions.

She made these arguments in several written submissions to the Court and through

her testimony at trial. Petitioner’s numerous and lengthy filings have caused this

Court and respondent to waste significant time and resources. She has maintained

her positions for many years despite repeated warnings and the imposition of a

$15,000 penalty pursuant to section 6673(a) in her first Tax Court case. We are

convinced she has instituted and maintained these proceedings primarily for delay.

Moreover, she has unreasonably failed to pursue available administrative

remedies; as previously discussed, she refused to cooperate during her audit.

Consequently, we shall grant respondent’s motion for a penalty and require
                                         - 20 -

[*20] petitioner to pay a penalty of $25,000 to the United States pursuant to section

6673(a)(1).

         The Court, in reaching its holdings, has considered all arguments made, and,

to the extent not mentioned, concludes that they are moot, irrelevant, or without

merit.

         To reflect the foregoing,


                                                        An appropriate order will be

                                                  issued, and decision will be entered

                                                  under Rule 155.
