T.C. Mem o. 2 01 5- 10 4

UNITED STAT ES TAX COURT
CURTIS E. LEYSHON, Peti ti on er v . COMM ISSI ONER OF INTERNAL REVENUE, Resp on de nt

Doc ke t No . 20 98 3- 13
. Fi le d J un e 3 , 20 15
.
P fai le d t o fi le a Fed eral in co m e ta x re tu rnfor20 10 an d t o rep ort co m

pe ns at io n h e rec ei ve d fr om two pay or s. Payors rep orte d pa ym en ts to th e In te rn al Rev enue Serv ic e (IR S) o n i nf orm at io n returns , andth e IRS is su edP a st atut ory no ti ce o f de fic ie nc y

th at de te rm in edbo th in co m e ta x a ndsel f-em pl oym en t t ax ari si ng fro m th e un rep orte d i nc om e. P ti m el y fil eda pe ti ti on . R m ov edforsu m

m ary jud gm en t. P’s o pp os it io n t o R ’s m ot io n fo r su m m ary jud gm en t ra is edsev eral fri vo lo us arg um en ts . The Co urt gr an te d R ’s m ot io n fo r su m m ary jud gm en t an d s uasp on te ord eredP to ap pe ar atth e p rev io us ly sch edul edcal en da r cal l t o s ho w cau se why th e Co urt s ho ul d n otim

po se on hi m

anI.R.C. s ec. 6 67 3( a)(1 ) pe na lty fo r m ak in g fr iv ol ou s ar gu m en ts . P res po nd edto th e o rd er t o s ho w cau se by fili ng a m ot io n fo r rec on si de rat io n o f th e o rd er, wh erei n h e reas se rte d the same friv ol ou s ar gu m en ts . P ap pe aredat t he cal en da r cal l, b utrathe r th anad dr es s the m eri ts of t he ord er t o s ho w cau se , he r eas se rte d the same friv ol ou s-2
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[* 2] arg um en ts th e Co urt h adpre vi ou sl y reject ed , des pi te th e Co urt’s se ve ral warn in gs th athe face d the ris k o f sa nc ti on s i f he pe rs is te d. Held : Th e Co urt m ay

co ns id er an y

rel ev an t fa ct s an d ci rcu m st an ces to de te rm in e whe th er t o i m po se anI.R.C. s ec. 66 73 (a)( 1) pe na lty

onP. Held , furth er, the Co urt wi ll tak e n ot ic e o f it s p ro ceed in gs ina pr io r cas e, in whi chP’s wife was the so le pe ti ti on er, b ecau se P pa rti ci pa te d i n tha t p rio r cas e an d was th ereb y gi ve n n ot ic e th athi s arg um en ts are fr iv ol ou s an d tha t s uc h a rg um en ts are s ub ject t o pe na lty . Held , furth er, the Co urt wi ll ex erci se it s d is cret io n t o i m po se an I.R.C. s ec. 6 67 3( a)(1 ) pe na lty of $ 2,0 00
.
Cu rti s E. Ley sh on , forhi m se lf. Oli vi a H. Rem

ba ch , forres po nd en t.

MEMORANDUM OPINION GUSTAFSON, Ju dg e: The In te rn al Rev enue Serv ic e (“ IRS” ) de te rm in eda de fic ie nc y

of $ 2,4 37 inpe ti ti on er Cu rti s Leysho n’s 2 01 0 F ed eral in co m e ta x, to ge th er wi th ad di ti on s t o t ax of $ 54 8 u nd er s ect io n 6 65 1( a)(1 ) fo r fai lu re t o ti m el y fil e h is return and$2 92 un de r se ct io n 6 65 1( a)(2 ) fo r fai lu re t o t im el y pa y-3
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[* 3] ta x. The Co urt g ran te d s umm ary jud gm en t i n fa vo r of res po nd en t, the 1 Co m m is si on er, s us ta in in g the IRS’s d et erm in at io ns , andsu a sp on te ord ered Mr. Leysho n t o s ho w cau se why he sh ou ldno t b e h el d l iabl e fo r a p en al ty und er se ct io n 6 67 3( a)(1 ) fo r m ai nt ai ni ng fri vo lo us an d d il at ory po si ti on s. Th e cas e is be fo re the Co urt o n M r. Ley sh on ’s m ot io n fo r rec on si de rat io n a s t o the de fic ie nc y an d o n the Co urt’s o rd er t o s ho w cau se as t o the pe na lty . For the reas on s di sc us se d b el ow, Mr . Ley sh on ’s m ot io n wi ll be de ni ed , th e o rd er t o s ho w cau se wil l b e m ad e ab so lu te , anda pe na lty of $ 2,0 00 wil l b e im

po se d o n M r. Ley sh on . Bac kg ro un d The fol lo win g fa ct s ar e d eri ve d fr om th e p et it io n, fr om

th e Co m m is si on er’s
su m m ary jud gm en t m ot io n, an d fr om th e rec or ds of t hi s C ou rt. 2

Unl es s o th erwi se in di cat ed , all sec ti on refe ren ces are t o the Int ern al 1 Rev enue Co de (“ Co de ”), an d a ll Ru le refer en ces are t o the Tax C ou rt Rul es of Prac ti ce an d P ro cedur e. All am ou nt s ar e ro un de d t o the ne ares t d ol lar. Ove r Mr. Leysho n’s o bjec ti on , see in fra p artII, we ta ke jud ic ia l n ot ic e, 2 pu rs ua ntto Fed . R. Evi d. 2 01 , of the reco rdinLis a Webb Ley sh on v. Co m m is si on er, T.C. Mem o. 2 01 2- 24 8, M r. Ley sh on ’s wife’s Tax Co urt pr oc eed in g a t d oc ke t No . 14 07 1- 11 . As is di sc us se d i n fu rth er d et ai l b el ow, Mr. Leysho n a tt en de d h is wife ’s tri al , satwith h er atco un se l t ab le , andass is te d he r in th atli ti ga ti on .-4
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[* 4] Mr. Ley sh on ’s 20 10 in co m e Mr. Leysho n h as a hi gh sch oo l educ at io n a ndwork s as a carp en te r. In 2 01 0 Mr. Leysho n re cei ve d $ 15 ,39 4 i n c om pe ns at io n fr om

Tho m as C. Vann oy and $7 00 fro m

So haHol di ng s, LLC. Bo thpa ym en ts were re po rte d t o the IRS b y th e pa y or s o n i nf

orm at io n re tu rn s. Mr . Ley sh on di d n otfil e a Fed eral in co m e ta x return fo r 20 10 when itwas due inApri l 2 01 1 (n orth erea fte r). Pri orpro ceed in gs co nc ern in g M r. Ley sh on ’s wife InJu ne 20 11 pe ti ti on er’s wif e, Lis a Webb Ley sh on , fil eda Tax Co urt ca se st y le d Leysh on v. Co m

m is si on er, T.C. Mem o. 2 01 2- 24 8, wi th fact s an d i ss ue s si mil ar t o tho se of M r. Ley sh on ’s pre se ntcas e. Ther e, Mrs . Ley sh onpe ti ti on ed th e Co urt fo r red et erm in at io n o f a 2 00 8 d efi ci en cy res ul ti ng fro m

un rep orte d in co m e (wag es ) an d an a dd it io n t o t ax for fai lu re t o t im el y

fil e a t ax return. Aft er Mrs . Ley sh on rai se d s ev eral “ ta x p ro te st er” arg um en ts (th atwere v ery si m il ar t o 3 Mr. Leysho n’s cu rren t ar gu m en ts ), th e Co m m is si on er m ov edth e Co urt t o i m po se 4
Pers on s wh o m ak e fri vo lo us an ti -ta x a rg um en ts are o fte n re ferr edto as “ ta x 3 pr ot es te rs ” o r “ ta x d efi ers ”. Wnu ckv. Co m m is si on er, 1 36 T.C. 49 8, 5 02 n.2 (2 01 1)
. Inth is cas e Mr. Leysho n m ak es th ree o f th e sa m e fri vo lo us arg um en ts th at

4 th e Co urt p rev io us ly rejectedinMrs . Ley sh on ’s cas e: (1) be cau se wage s an d in co m e are no t the same thi ng inth e Co de , wage s d o n otco ns ti tu te tax ab le in co m e, an d the de fin it io n o f wag es is li m it edto th atsetforthinsec ti on s 3 40 1 t o (co nt in ue d...)-5
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[* 5] on Mrs . Ley sh on a pe na lty pu rs ua ntto sec ti on 66 73 (a)( 1) (B) fo r m ai nt ai ni ng a fri vo lo us or g ro un dl es s l it ig at io n p os it io n. Mr. Leysho n a tt en de d a ndpa rti ci pa te d i n M rs . Ley sh on ’s tri al inMay 201 2. The tri al trans cri ptsh ows th atMr. Ley sh on was p erm it te d t o s itat c ou ns el tab le with M rs . Ley sh on , th atsh e co ns ul te d wi th hi m durin g the tri al , andth athe ha d dr aft eddo cu m en ts th atwere fi le d i n h er ca se . Mrs . Ley sh on ex pl ai ne d: “ My hu sb an d h as po wer-o f-at to rn ey an d h e h as alwa y s t ak encare of a ll of t he tax is su es an d was tak in g c are o f th e m ot io n. I d eferto hi m to ex pl ai n u nd er o ath i f
ne ces sa ry .” The C ou rt a dv is edMrs . Ley sh on th atitwou ldno t p erm itMr. Ley sh on to rei te rat e th e fri vo lo us arg um en ts inhe r fi li ng s ab ou t wh y Mrs
. Ley sh on di d n otha ve to pa y in co m e ta x. Th e Co urt the n warne d M rs . Ley sh on :

“ [I]f y oum ak e th os e arg um en ts , y ouco ul d b e subjec t t o s an ct io ns an d youli ke ly are g oi ng to owe m or e m on ey th any ouwou ldif you ju stfoc us edon th e ta x li ab il ity .” Und et erre d, M rs . Ley sh on m ad e se ve ral fri vo lo us arg um en ts to th e effe ctth atsh e d idno t h av e a dut y to pa y in co m e ta x. Th e Co urt the n a ga in (...co nt inue d) 4 34 06 ; (2 ) th e te rm

“ withh ol di ng ag en t” is stric tl y li m it edto pe rs on s re qu ire d t o de du ctan d wi th ho ldtax as d efi ne d i n s ect io n 7 70 1( a)(1 6) an d i s l im it edto no nres id en t al ie ns , for ei gnco rp or at io ns , andfor ei gn org an iz at io ns ; (3 ) th e IRS di d n ot ha ve th e au th or ity

to ass es s t ax be cau se th e reg ul at io ns (un de r whi chth e IRS as se ss edth e ta x) are o nl y a gr an t o f in te rp ret iv e ru le m ak in g p owe r an d the refo re ha ve no au th or ity .-6
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[* 6] warn edMrs . Ley sh on : “ As far as y ou r du ty to p ay in co m e ta x, tha t’s i n the In te rn al Rev enue Co de . I’ m no t g oi ng to go th ro ug h a ll th atwith you . I’ ve to ld y ouif you c on ti nu e to m ak e th es e arg um en ts y oupo te nt ia ll y co ul d b e subjec t t o sa nc ti on .” All th is oc cu rredinMay 201 2 wh il e Mr. Leysho n s atat c ou ns el tab le with h is wife . At th e co nc lu si on of t he tri al , th e Co urt t oo k the Co m m is si on er’s
m ot io n fo r sa nc ti on s u nd er ad vi se m en t. Ina Mem or an du m

Opi ni on is su edAug us t 2 8, 2 01 2, the Co urt h el d tha t Mrs . Ley sh on fai le d t o re po rt wa ge s an d h er re ti rem en t d is tri bu ti on an d tha t s he
was li ab le forth e se ct io n 6 65 1( a)(1 ) ad di ti on to tax forfai lu re t o t im el y fil e a t ax return. Se e Ley sh on v. Co m m is si on er, T.C. Mem o. 2 01 2- 24 8. Th e Co urt n ot ed th atMrs . Ley sh on di d n otrefu te th atsh e rec ei ve d andfai le d t o re po rt wa ge s an d he r ret ire m en t d is tri bu ti on , andhe ldth athe r arg um en ts were “ witho utm eri t an d la ckfactua l an d l eg al fou nd at io n.” Id. at*8
. Indi sc us si ng whet he r to im po se a pe na lty

un de r se ct io n 6 67 3, the Co urt’s Aug us t 2 01 2 o pi ni onno te d tha t “ [p ]etit io ne r’s arg um en ts are m an ife st ly fri vo lo us ” an d tha t i t ap pe ared“ th atpe ti ti on er co pi edth e subs tanc e o f he r do cu m en ts fro m

th e In te rn et ”. Id . at * 10 . Non ethe le ss , th e Co urt ex erci se d i ts di sc ret io n a ndde cl in edto im po se a se ct io n 6 67 3 p en al ty on M rs . Ley sh on be cau se itwas h er fi rs t t im e in Fed eral co urt-- “bu t we s te rn ly w arnpe ti ti on er tha t we wi ll-7
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[* 7] li ke ly im

po se th is pe na lty

if s he returns to th is Co urt an d m ak es si m il ar arg um en ts inth e fu tu re.” Id. at*1 1. 5 The IRS’s n ot ic e o f de fic ie nc y an d M r. Ley sh on ’s pet it io n Whe n the IRS b ecame aware o f Mr. Leysho n’s 2 01 0 i nc om e an d h is no nfil in g o f a return, i t ex am in edth e is su e o f hi s l iabi li ty for 2 01 0. Th e IRS
ev en tu al ly iss ue d t o M r. Ley sh on a st atut ory no ti ce o f de fic ie nc y

(“ no ti ce”) da te d Ju ne 3, 2 01 3. Th e n ot ic e d et erm in edin co m e ta x o f $5 63 an d s el f-em pl oym en t t ax of $2 ,27 4 a ndm ad e anun ex pl ai ne d n eg at iv e in co m e ad jus tm en t o f $4 00 , foran in co m e ta x d efi ci en cy

to ta li ng $2 ,43 7, p lu s ad di ti on s t o t ax to ta li ng $8 40 un de r se ct io n 6 65 1( a)(1 ) an d (2 ) fo r fai lu re t o t im el y fil e an d fa il ur e to ti m el y pa y . The reaf te r, Mr. Leysho n t im el y

fil edhi s p et it io n i n thi s C ourt. M r. Ley sh on res id edinNort h C aro li nawhen he fil edhi s p et it io n. Th e p et it io n i nc lu de s thi s se nt en ce: “ The IRS h as no t d is cl os edwhat‘ Subt it le A - Inc om e Tax ’ th e Not ic e of Defi ci en cy

pe rta in s t o i n a cco rd[si c] § 62 11 an d § 62 12 .” (Thi s s tate m en t ap pe ars to refl ectMr. Ley sh on ’s m is ta ke n a ss um pt io n, d is cu ss edbe lo w, th at

Mrs . Ley sh on ’s subs eque ntap pe al to th e U.S. Co urt o f App eal s fo r th e 5 Fo urthCir cu it , do ck etNo. 1 2- 24 78 , was d is m is se d b ecau se th e n ot ic e o f ap pe al was no t t im el y

fil ed , anda jud gm en t was en te redforth e Co m mis si on er o n M arch 28 , 20 13
.-8
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[* 8] sel f-em

pl oym en t t ax is no t i nc om e ta x u nd er s ub ti tl e A of th e Co de bu t ra th er em pl oym en t t ax un de r subt it le C.) The Co m m is si on er’s m ot io n fo r su m m ary jud gm en t On J un e 2 4, 2 01 4, the Co m m is si on er fi le d am ot io n fo r su m m ary jud gm en t. The Co m m is si on er s ou gh t s umm ary jud gm en t o n the is su es of ( 1) Mr. Ley sh on ’s li ab il ity for th e in co m e ta x d et erm in edinth e n ot ic e o f de fic ie nc y an d (2 ) hi s li ab il ity for th e ad di ti on to tax de te rm in edinth e n ot ic e und er s ect io n 6 65 1( a)(1 ) fo r fai lu re t o t im el y

fil e a return. (Th e n ot ic e al so de te rm in edanad di ti on un de r se ct io n 6 65 1( a)(2 ) fo r fai lu re t o t im el y pa y , pre m is edon a subs ti tu te forreturn (“ SFR” ) pr ep aredby the IRS, b utth e Co m m is si on er co nc ed edth atis su e in hi s
m ot io n fo r su m

m ary jud gm en t.) On J ul y 18 , 20 14 , Mr. Ley sh on fil edhi s o pp os it io n t o the m ot io n fo r su m m ary jud gm en t. Mr . Ley sh on ’s op po si ti on arg ue d a t l en gt h abo utth e in ad equa cy

of t he IRS’s p ur

po rte d S FR an d abo utth e in su ffi ci en cy of t he pa y or s’ in fo rm at io n re tu rn s t o s up po rt t he IRS’s p os it io n re ga rd in g h is li ab il ity . Mr. Leysho n re pe at edsev eral fri vo lo us an ti -ta x a rg um en ts th atha ve be en su m m ari ly rejectedby thi s C ou rt. Se e supr a n ot e 4 . One o f hi s p rimary arg um en ts
was th at , si nc e “ wag es ” an d “ in co m e” ar e n otth e sa m e th in g i n the Co de , “ W ag es do no t ‘con st itut e ta xabl e in co m e’”. His l en gt hy op po si ti on cit ed , qu ot ed , and-9
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[* 9] m is co ns tru edm

ul ti pl e irrel ev an t s ta tu te s an d c as es . PartIV.D of the op po si ti on in cl ud es th e st at em en t tha t “ All Subt it le C Part31 -Em pl oym en t Tax es * * * i s PR ECLUDED from ‘ de fic ie nc y ’ or‘ no ti ce o f de fic ie nc y ’ in 26 U.S.C. § 62 11 an d 2 6 U.S.C. § 62 12 .” The Co urt’s o rd er o f Ju ly 31, 2 01 4 The Co urt g ran te d the Co m m is si on er’s m ot io n fo r su m m ary jud gm en t b y or de r da te d J ul y

31 , 20 14 . The o rd er s ta te d: Mr. Leysho n’s co nt en ti on th at“ W ag es do no t ‘con st itut e ta xabl e in co m e’” is fri vo lo us , as are h is othe r co nt en ti on s i n p art s IV.A th ro ug h IV.K atpa ge s 8 -2 6 o f hi s o pp os it io n. Fo r rea so ns we ha ve fu ll y ex pl ai ne d, s ee Wnu ckv. Co m mis si on er, 1 36 T.C. 49 8 (2 01 1) , we ne edno t an d wi ll no t ad dr es s the se fri vo lo us arg um en ts . The same ord er quo te d s ect io n 6 67 3( a), wh ic h p ro vi de s a p en al ty for fri vo lo us co nt en ti on s, an d d ire ct edMr. Ley sh on to ap pe ar atth e Co urt’s tria l s es si on an d t o sh ow caus e why the Co urt s ho ul d n otim po se su cha pe na lty

onhi m . The o rd er st at ed : It app ears po ss ib le th atso m eo ne othe r th anMr. Ley sh on hi m se lf h as co m po se d h is fri vo lo us arg um en ts . If th atis th e cas e, an d i f Mr. Leysho n d is cl ai m s tho se fri vo lo us arg um en ts , th enth e Co urt wi ll ta ke th atin to acco un t i n d eci di ng whet he r to im po se a pe na lty . Inres po ns e to th e Co urt’s o rd er, o n Au gu st29 , 20 14 , Mr. Ley sh on fil eda
m ot io n fo r rec on si de rat io n o f th e Co urt’s o rd er, wh erei n h e rea ss ert edhi s-1 0-

[* 10 ] fri vo lo us arg um en ts . His m ot io n i nc lu de s s ev eral st at em en ts to th e eff ect th atth is cas e in vo lv es “ Subt it le C Part31 --Em pl oym en t Tax an d n ota Subt it le A Part1 ‘Inc om e Tax .’ ” The Sep te m

be r 20 14 cal en da r cal l Whe n thi s ca se was c al le d o n S ep te m be r 22 , 20 14 , th e Co urt warne d Mr. Leysho n n otto reas se rt t he same friv ol ou s co nt en ti on s tha t the Co urt h ad reject edinit s o rd er o f Ju ly 31, 2 01 4: THE COURT: I do wantto rem in d youth atI’ve res ol ve d c ert ai n is su es an d warne d youth aty ou r co nt en ti on s ab ou t the m were fri vo lo us , th ere’s n o b as is forth os e co nt en ti on s. An d c on se qu en tl y , I’m cert ai nl y no t i nv it in g youto ren ew th os e arg um en ts . And in st ead --n oram

I in vi ti ng y outo reh as h anyth in g tha t we’ve alr eady do ne . I wantto m ak e su re tha t the re’s n o v al idarg um en t tha t you wan t t o m ak e th atI ha ve n’t yet he ardor a dd res se d. So I no w in vi te y outo sp eak , if you’d l ik e to do so . Des pi te th is warn in g, M r. Ley sh on di d n otad dr es s the m eri ts of t he ord er t o s ho w cau se why a se ct io n 6 67 3 p en al ty sho ul d n otbe im po se d b utrathe r rep eat edhi s arg um en ts as t o wh y

he is no t l iabl e fo r in co m e ta x. He b eg anwith h is arg um en t th atequa te s emplo ym en t t ax es an d i nc om e ta x o n s el f-em pl oym en t i nc om e: Abo ut80 pe rcen t o f th e al le ge d d eb t i s o ff o f Subt it le (c) an d 6 21 1 do es no t au th or iz e a Subt it le (c) n ot ic e o f de fic ie nc y . It’s $ 22 87
. Andfor sel f-em pl oym en t t ax , em

pl oym en t t ax is Subt it le (c). Nob ody ha s ad dr es se d thi s as of yet. Subt it le (c) i s wag es as d efi ne d in 34 01 . Em

pl oyees are p ai d wag es an d the y workforem

pl oyers al so-1 1-

[* 11 ] un de r th e sa m e co de sec ti on . Andth ey are p recl ud edfro m be in g i n a62 11 no ti ce o f de fic ie nc y . (Thi s ar gu m en t h adalr eady be enm ad e in pa rt I V.D of Mr . Ley sh on ’s op po si ti on an d h adbe ensu m

m ari ly rejectedinth e o rd er o f Ju ly 31, 2 01 4.) Mr. Leysho n’s ar gu m en ts at t he cal en da r cal l al so in cl ud ed : (1 ) th atth e no ti ce was in va li d b ecau se itwas n otba se d o n a de qu at e ev id en ce (a n a rg um en t th atha d a lre ady

be enm ad e in part I V.E of Mr . Ley sh on ’s op po si ti on an d h adbe en reject ed ); (2) th atth e n ot ic e was no t b as edon a va li d S FR (an a rg um en t tha t h ad

6 al read y be enm ad e in pa rt I V.E of Mr . Ley sh on ’s op po si ti on an d h adbe en reject ed ); an d (3 ) th atth e IRS di d n otm ak e a d et erm in at io n o f ta x (an a rg um en t

7
Inde te rm in in g the va li di ty of a s ta tu to ry no ti ce o f de fic ie nc y , we do no t 6 lo okbe hi ndth e n ot ic e to ex am in e th e ev id en ce u se d b y th e IRS or t o c on si de r th e pr op rie ty of th e IRS ’s m ot iv es or t he adm in is tra ti ve po li cy or p ro cedur e in vo lv ed in m ak in g ade te rm in at io n. Se e Greenbe rg ’s Exp res s, In c. v. Co m m is si on er, 6 2 T.C. 32 4, 3 27 (19 74 ); C av al laro v. Co m m is si on er, T.C. Mem o. 2 01 4- 18 9, at*1 8. To b e v al id , th e st atut ory no ti ce o f de fic ie nc y

ne edon ly adv is e th e ta xp ay er tha t th e IRS “ ha s i n fa ctde te rm in eda de fic ie nc y an d s pe ci fy

th e y ear a ndde fic ie nc y am ount .” See Pe te rm anv. Co m m is si on er, T.C. Mem o. 1 99 3- 12 9 (c it in g C am pb el l v. Co m m is si on er, 9 0 T.C. 1 10 , 11 5 (1 98 8) ). If th e st atut ory no ti ce m eet s thi s st an da rd , th enitcansupp ort Tax Co urt juris di ct io n o ve r th e cas e, an d we t he n de ci de th e cas e o n the ba si s o f th e ev id en ce p res en te d i n c ou rt ( no t n eces sa ril y th e ev id en ce re li edonby the IRS o ffi ci al s wh o i ss ue d the no ti ce). As we h adalr eady

st at edinou r or de r of

Ju ly 31, 2 01 4: 7 [T]he v al id ity

of t he IRS’s d et erm in at io n o f anin co m e ta x d efi ci en cy do es no t d ep en d o n a ny SFR. On the othe r ha nd , wher e a t ax pa y er (co nt in ue d...)-1 2-

[* 12 ] th atha d a lre ady

be enm ad e in pa rt I V.G of Mr . Ley sh on ’s op po si ti on an d ha d b eenreject ed ). 8 The Co urt i nt errupt edMr. Ley sh on : “ Mr. Leysho n, you’re rep eat in g the
co nt en ti on s tha t I’ve alr eady ad dr es se d i n my

ord er an d I c an ’t--al l I h av e is
wor ds . W e’re de al in g h ere wi th anin co m e ta x, n otanem pl oyer tax li ab il ity . The
no ti ce o f de fic ie nc y

is pl ai nl y su ffi ci en t.” M r. Ley sh on co nt in ue d t o a rg ue th at th ere was no va li d d et erm in at io n a ndth atth e IRS di d n othave au th or ity to m ak e a de te rm in at io n. Th e Co urt at te m pt edto sh iftth e subjec t t o “ th in gs th atwou ldhe lp
m e to de ci de th e is su e o f th e 6 67 3( a) p en al ty”, bu t M r. Ley sh on so on res um edhi s (...co nt inue d) 7 do es no t fi le a return, h is li ab il ity forth e ad di ti on to tax un de r se ct io n 66 51 (a)( 2) --wh ic h turns ona ta xp ay er’s fai lure ‘to pa y th e am ou nt sh own as t ax on an y

return’--d oe s d ep en d o n the IRS’s p rep arat io n o f a v al idSFR. Wheel er v . Comm is si on er, 1 27 T.C. 20 0, 2 10 (20 06 ), aff’d, 5 21 F.3d12 89 (10 th Cir . 20 08 ). Howev er, Mr . Ley sh on ’s arg um en ts ab ou t d efec ts inth e SFR are m oo t, i n v ie w of the Co m m is si on er’s co nc es si on of t he fai lu re-t o- pa y ad di ti on to tax . The IRS’s n ot ic e o f de fic ie nc y ex pl ic it ly stat ed : “ W e h av e d et erm in edth at 8 th ere i s a d efi ci en cy

(in crea se ) in y ou r in co m e ta x a s s ho wn ab ov e” (i .e., inth e am ountof $ 2,4 37 ). Att ach m en ts to th e n ot ic e sh owe d a n a dju st m en t t o i nc om e in th e am ou ntof $ 15 ,39 4 (i .e., rathe r th anzero ), res ul ti ng fro m “ Oth er Mi sc el lane ou s In co m e (1 09 9- MIS C)”, an d e xp la in edth e ad jus tm en t as fol lo ws: “ W e u se d In fo rm at io n R eturn Do cu m en ts fil edby pay ers as r ep orte d u nd er y ou r So ci al Secu rit y Num be r to de te rm in e y ou r in co m e. If y oune edanit em iz edli stof p ay ers an d a m ou nt s o f th e in co m e rep orte d t o the Int ern al Rev enue Serv ic e, y oum ay reque stth is in fo rm at io n b y cal li ng th e to ll -fre e num be r orwrit in g t o the ad dr es s sh own on th e acc om

pa nyin g l et te r.”-1 3-

[* 13 ] arg um en t tha t h e is no t l iabl e fo r in co m e ta x. Th e Co urt ad jou rn edth e he ari ng . Dis cu ss io n I. Mr. Leysho n’s m ot io n fo r rec on si de rat io n Mr. Leysho n’s m ot io n fo r rec on si de rat io n ra is edm ul ti pl e fri vo lo us arg um en ts th atwe do no t ad dr es s h ere. We do , ho wev er, ad dr es s o ne erro ne ou s arg um en t (t he on e wit h wh ic h h e b eg anat t he he ari ng ) as to whi chwe as su m e h e
m ay ha ve a ge nu in e m is un de rs tand in g: The de fic ie nc y

pro cedur es setou t i n s ect io ns 62 11 th ro ug h 6 21 6, wh ic h
au th or iz e th e IRS to is su e a n ot ic e o f de fic ie nc y , app ly to “ in co m e, es tate , andgi ft ta xe s i m po se d b y subt it le s A [“ In co m e Tax es ”, se cs . 1-1 56 3] an d B [“ Est at e an d GiftTaxe s” , sec s. 2 00 1- 28 01 ]”. Sec. 6 21 1( a); see als o s ec. 6 21 2( a). Itis co rrec t th atth os e d efi ci en cy

pro cedur es do no t ap pl y

to subt it le C (“ Em

pl oym en t Tax es ”,
se cs . 31 01 -3 51 0) . Mr. Ley sh on ob se rv es th at80 % of the tax at i ss ue he re i s refe rredto inth e n ot ic e o f de fic ie nc y as “ se lf- em

pl oym en t t ax ”, an d h e h as as su m edth atsu chtax is th eref or e wit hi n the “ Em

pl oym en t Tax es ” im

po se d b y subt it le C. Howev er, h e is m is ta ke n. Th e “ se lf- em pl oym en t t ax ” li ab il ity

th atth e IRS d et erm in edinth e n ot ic e o f de fic ie nc y at i ss ue he re i s n otsubt it le C

“ Em pl oym en t Tax es ” b utrathe r “ Tax onSel f-Em pl oym en t In co m e” i m

po se d b y-1 4-

[* 14 ] ch ap te r 2 o f subt it le A of the Co de . See s ec. 1 40 1( a) (“ th ere s ha ll be im po se d * * * on th e se lf- em pl oym en t i nc om e o f ev ery in di vi du al , a tax ”; (em ph as is ad de d) ). Co ns eque nt ly, th e IRS cert ai nl y do es ha ve au th or ity

to em pl oy defi ci en cy pr oc edur es to ass es s “ se lf- em pl oym en t t ax ”. See Fr as er v . Comm is si on er, T.C. Mem o. 1 99 7- 18 2, af f’d witho utpubl is he d o pi ni on , 13 9 F .3d90 4 (9 th Cir
. 19 98 ). II. Ju di ci al no ti ce On J anua ry

16 , 20 15 , th e Co urt en te redanord er g iv in g the pa rti es no ti ce th at , pu rs ua ntto Ru le 20 1( b) of t he Fed eral Ru le s o f Evi de nc e, th e Co urt i nt en de d to tak e jud ic ia l n ot ic e o f th e rec or d i n M rs . Ley sh on ’s Tax Co urt ca se . W e pr op os edto tak e su chno ti ce b ecau se of t he fact s d is cl os edinth atreco rdab ou t Mr. Leysho n’s p ers on al pa rti ci pa ti on inth atcas e an d h is res ul ti ng awaren es s o f th e Co urt’s s ta te m en ts inth atcas e. On Fe brua ry 2, 2 01 5, M r. Ley sh on fil edan

“ Opp os it io n t o ORDER t o Tak e Ju di ci al Not ic e o f The Cas e o f Lis a Webb Ley sh on --Do ck etNo. 1 40 71 -1 1” . Mr. Ley sh on do es no t d en y hi s p art ic ip at io n i n hi s wi fe’s cas e n ordi sc la im kn owl ed ge of i ts pro ceed in gs , bu t h e m ak es two pr in ci pa l ar gu m en ts ag ai ns t the Co urt’s t ak in g ju di ci al no ti ce, t o wh ic h we n ow br ie fly resp on d.-1 5-

[* 15 ] A. The Co urt’s “ st an di ng ” Mr. Leysho n a ss ert s tha t the Co urt “ la ck s s tand in g o r au th or ity ” to tak e jud ic ia l n ot ic e o f th e rec or d i n M rs . Ley sh on ’s cas e. The C omm is si on er d idno t
m ov e fo r a p en al ty or as k u s t o t ak e n ot ic e o f th e p rio r cas e; an d the gi stof Mr. Leysho n’s co nt en ti on see m s t o b e th at , by ta ki ng no ti ce, the Co urt h as in effe ctab an do ne d ju di ci al in de pe nd en ce an d h as tak ensi de s wi th an d d on e th e job of on e o f th e p art ie s. Infact , th e Co urt h as ex pl ic itau th or ity to “ ta ke jud ic ia l n ot ic e o n i ts own ”. Fed . R. Evi d. 2 01 (c)( 1) (em ph as is ad de d) . W e d o s o i n thi s ca se no t t o p ro m ot e th e Co m m is si on er’s i nt eres ts as ali ti gantbu t ra th er t o p ur su e th e Co urt’s o wn in te res t i n m an ag in g i ts ownbu si ne ss . The Tax Co urt ex is ts to pro vi de a fo ru m fo r li ti ga ti on of t ax pa y ers ’ bo nafid e d is pu te s wi th th e IRS . The Co urt’s ab il ity to pe rfo rm th atfun ct io n i s i m

pe de d wh ena ta xp ay er fi le s a p et it io n fo r so m e o th er reas on , su chas t o d efy th e la w or t o d el ay th e in ev it ab le . There fo re, qui te ap art fro m th e Co m m is si on er’s i nt eres t i n the sec ti on 66 73 pe na lty , th e Co urt h as it s own leg it im at e in te res t i n i m po si ng th e p en al ty, whe re ap pr op ria te . The s ta tu te do es no t b y

an y m ean s m ak e th e IRS th e g at ek eep er o f th is is su e b utrathe r au th or iz es th e p en al ty “ [w]hen ev er i t ap pe ars to th e Tax Co urt tha t” th e li ti ga ti on is fri vo lo us or d il at ory . Sec. 6 67 3( a)(1 ) (em ph as is ad de d) . Thu s, the Co urt o fte n-1 6-

[* 16 ] im po se s a s ect io n 6 67 3 p en al ty suasp on te , see , e.g., Go lub v
. Co m m is si on er, T.C. Mem o. 2 01 3- 19 6, at*1 0- *1 1; Toth v . Comm is si on er, T.C. Mem o. 2 01 3- 14 2, at*4 -* 5; an d we wi ll do so he re. B. The id en ti ti es of t he pa rti es Mr. Leysho n s ug ge st s tha t the Co urt i s co nf us edab ou t wh o the pe ti ti on er i s in th e p res en t ca se an d tha t the Co urt “ is att em pt in g t o c on fla te two sep arat e cas es ” an d the reco rd s o f th os e cas es . On th e co nt rary, the C ou rt i s fu ll y aware th atth e p et it io ne r in th e p res en t ca se is Mr. Ley sh on an d tha t n othe bu t Mrs . Ley sh on was the so le pe ti ti on er i n Leysh on v. Co m m is si on er, T.C. Mem o. 20 12 -2 48 . The Co urt’s au th or ity to tak e jud ic ia l n ot ic e o f co urt p ro ceed in gs ex te nd s t o the reco rd s o f ot he r jud ic ia l p ro ceed in gs (in cl ud in g p ro ceed in gs in vo lv in g o th er p art ie s) , “ ‘if th os e p ro ceed in gs ha ve a di rectrel at io n t o m at te rs at is su e’”. See Co lo ni al Pen n In s. Co . v. Co il , 88 7 F .2d12 36 , 12 39 (4t h C ir. 1 98 9) (quo ti ng St. Lo ui s B ap ti stTem pl e, In c. v. FDI C, 60 5 F .2d11 69 , 11 72 (10 th Cir
. 19 79 )). The ob vi ou s “ di rectrel at io n” of M rs . Ley sh on ’s cas e to th e cu rren t ca se is th at , inth atpri orcas e, Mr. Leysho n a tt en de d a ndpa rti ci pa te d i n the tri al by dr aft in g d oc um en ts th atwere fi le d i n h er ca se , si tt in g wi th he r atco un se l t ab le , an d c on su lt in g wi th he r du rin g the tri al . In h is owncas e, Mr. Leysho n ra is es th ree of th e sa m e fri vo lo us arg um en ts th atth e Co urt re jecte d i n aMem or an du m Opi ni on-1 7-

[* 17 ] inMrs . Ley sh on ’s cas e an d tha t p ro m pt edth e Co urt’s warn in g tha t s he ris ke d b ei ng san ct io ne d i f sh e m ad e si m il ar ar gu m en ts inth e fu tu re. Mr. Ley sh on ’s parti ci pa ti on inMrs . Ley sh on ’s cas e p la cedhi m on no ti ce tha t the ve ry arg um en ts he gh os t-wr ot e fo r Mrs . Ley sh on were fri vo lo us an d p ot en ti al ly
sa nc ti on ab le . It wo ul d b e in ap pr op ria te , inou r co ns id erat io n o f hi s l iabi li ty for a pe na lty , to tre athi m

as i f he were u nwi tt in g o r in no cen t i n m ak in g h is fri vo lo us arg um en ts --an d the reco rdinMrs . Ley sh on ’s cas e en ab le s u s t o h av e a cl ear a nd
accu rat e p ic tu re o f Mr. Leysho n’s cu lp ab il ity he re. Acco rd in gl y , we wil l t ak e jud ic ia l n ot ic e o f th e rec or d i n the pri orcas e fo r pu rp os es of d et erm in in g the ap pr op ria te ne ss an d a m ou ntof ape na lty inth is cas e. III. The sec ti on66 73 pe na lty A. Leg is la ti ve pu rp os e A tax pa y er’s i nv oc at io n o f jud ic ia l re vi ew is pro pe rly rese rv edforbo nafid e di sp ut es , rathe r th anbe in g u se d t o p os tp on e th e as se ss m en t an d c ol le ct io n o f de fic ie nc ie s. See Wnu ckv. Co m m is si on er, 1 36 T.C. 49 8, 5 06 (20 11 ). The Co urt’s re so ur ces are was te d wh ena ta xp ay er b rin gs fri vo lo us or g ro un dl es s cl ai m s. See Crai n v . Comm is si on er, 7 37 F.2d14 17 , 14 17 (5t h C ir. 1 98 4) ; W il li am s v . Comm is si on er, 1 14 T.C. 13 6, 1 39 (20 00 ). Co ns eque nt ly, th is Co urt ha s b eengi ve n d is cret io n t o i m po se pe na lt ie s o n t ax pa y ers who en ga ge insu ch-1 8-

[* 18 ] co nduc t. Co ng res s en act edth e p en al ty pro vi si on insec ti on 66 73 inord er t o de te r fri vo lo us li ti ga ti on an d t o i nduc e ta xp ay ers to co nf orm th ei r co nduc t t o se tt le d p rin ci pl es of l aw be fo re p ur su in g l it ig at io n. Se e Co le m anv. Co m m is si on er, 7 91 F.2d68 , 86 (7t h C ir. 1 98 6) ; Tak ab a v . Comm is si on er, 1 19 T.C. 28 5, 2 95 (20 02 ); Gra ss el li v. Co m mis si on er, T.C. Mem o. 1 99 4- 58 1. B. Sect io n 6 67 3( a)(1 ) ge ne ral ly Und er s ect io n 6 67 3( a)(1 ), th e Co urt m ay im po se a pe na lty

of up t o $ 25 ,00 0 9 whe n atax pa y er p ur su es anact io n i n the Tax C ou rt a ndth e Co urt d et erm in es th at ei th er: (1) th e ta xp ay er i ns ti tu te d o r m ai nt ai ne d l it ig at io n i n the Co urt p rimaril y
Si nc e 1 98 9, s ect io n 6 67 3( a)(1 ) ha s p ro vi de d: 9 SEC. 6 67 3( a). Tax Co urt Pr oc eed in gs .--

(1 ) Pro cedur es in st itut edpri m ari ly for d el ay , etc .-- Whe ne ve r itap pe ars to th e Tax Co urt tha t--

(A) p ro ceed in gs be fo re i t h av e b eenin st itut edor m ai nt ai ne d b y

th e ta xp ay er p rimaril y

forde lay , (B) the tax pa y er’s p os it io n i n s uc h p ro ceed in g i s fri vo lo us or g ro un dl es s, o r (C) the tax pa y er u nr eas on ab ly fail edto pu rs ue av ai labl e adm in is tra ti ve rem ed ie s, th e Tax Co urt, i n i ts de ci si on , m ay requi re the tax pa y er t o p ay to th e Uni te d S ta te s a p en al ty notinex ces s o f $2 5,0 00
.-1 9-

[* 19 ] forde lay ; (2 ) th e ta xp ay er’s l it ig at io n p os it io n i s fr iv ol ou s o r gr ou nd le ss ; o r (3 ) th e ta xp ay er u nr eas on ab ly fail edto pu rs ue adm in is tra ti ve rem ed ie s b efo re pu rs ui ng jud ic ia l re li ef i n the Co urt.

1. Dela y The Tax C ou rt h as reco gn iz edcert ai n t ax pa y er co nduc t tha t o fte n de m on st rat es a pr im ary purp os e o f de lay . Suc h c on du ctin cl ud es : re m ai ni ng un res po ns iv e in th e Co m m is si on er’s s et tl em en t at te m pt s o r tr ia l p rep arat io n act iv ity , fil in g m

ul ti pl e fri vo lo us m ot io ns or d oc um en ts , reque st in g m ul ti pl e co nt in ua nc es an d fa il in g t o app ear, fa il in g t o m eetde ad li ne s, re fu si ng to fol lo w th e Co urt’s o rd ers , andfai li ng to co op erat e in th e st ip ul at io n p ro ces s. See , e.g., Gof f v. C omm is si on er, 1 35 T.C. 23 1, 2 37 (20 10 ) (fi nd in g tha t b y fai li ng to co m

pl y with the bri efi ng sch edul e, as ki ng forco nt inua nc es , andbri ng in g o nl y fri vo lo us cl ai m s, the tax pa y er s ho wedth athi s p ur po se for bri ng in g the cas e was to de lay th e co ll ect io n o f ta x l iabi li ti es ); Wil li am s v . Comm is si on er, 1 19 T.C. 27 6, 2 80 -2 81 (2 00 2) (fi nd in g tha t a p ur po se of d el ay

was s ho wn wh ere t he tax pay er i m pr op erl y us edth e b an krup tc y

co urts to de lay

th e Tax Co urt p ro ceed in gs , fai le d t o app ear a t he ari ng s an d t o c om

pl y with C ou rt o rd ers , fai le d t o re pl y to th e Co m

m is si on er’s
se tt le m en t o ffer s, an d fa il edto res po ndto di sc ov ery reque st s) ; Tro wbr id ge v. Co m m is si on er, T.C. Mem o. 2 00 3- 16 5 (f in di ng th atth e ta xp ay er’s hun dr ed s o f-2 0-

[* 20 ] pa ge s o f di sc ov ery reque st s, ab ruptch an ge inco ur se two week s b efo re tria l,
an d re fu sa l t o app ear f

ortri al ev id en ceda pr im ary pu rp os e o f de lay), aff’d, 1 01 Fed . App x. 3 (5t h C ir. 2 00 4) ; Lo es ch er v . Comm is si on er, T.C. Mem o. 1 99 3- 74 (fi nd in g tha t a p ur

po se of d el ay

was s ho wn wh ere t axpa y er re qu es te d two co nt in ua nc es , bas edon un subs tant ia te d c la im s o f m ed ic al di so rd ers , fai le d t o res po ndto di sc ov ery reque st s, fa il edto ap pe ar attri al , andge ne ral ly fail edto adva nc e th e cas e). The se be ha vi or s al on e o r co m bi ne d h av e le d t o s ect io n 6 67 3 pe na lt ie s o n the ba si s o f de lay .

2. Fri vo lo us or g ro un dl es s p os it io ns Co urts ha ve fou ndcas es fri vo lo us wher e th e ta xp ay er’s p os it io n i s un fo un de d i n l aw. A tax pa y er’s cl ai m is fri vo lo us , po te nt ia ll y

warran ti ng a 1 0 The Tax C ou rt h as reject eda se rie s o f co m m on tax de fie r arg um en ts an d 1 0 ha s i m po se d s an ct io ns onth e ta xp ay ers who adva nc e th em . See, e.g ., Nis F am il y Trus t v . Comm is si on er, 1 15 T.C. 52 3 (2 00 0) ; Webs te r v. C omm is si on er, T.C. Mem o. 2 00 6- 14 4, af

f’d, 26 8 F ed . App x. 6 74 (9t h C ir. 2 00 8) ; Ad am s v . Co m m is si on er, T.C. Mem o. 2 00 6- 11 4. Th es e arg um en ts in cl ud e, bu t ar e n ot li mit edto : the ass ert io n tha t wag es are n otin co m e, co ns ti tu ti on al ob jecti on s s uc h as refu sa l t o p ro vi de in fo rm at io n t o the IRS u nd er the Fif th Am en dm en t an d the rig htto a jury tria l, an d d efi ci en ci es res ul ti ng fro m co nt rib ut io ns to a sh am

tru st , ch ur ch -rel at edarrang em en ts , andtax sh el te rs . See, e.g ., Uni te d S ta te s v . Sul li va n, 27 4 U.S. 2 59 (19 27 ) (h ol di ng th atth e Fi fth Am en dm en t wi ll ne ve r jus ti fy a co m pl et e fai lu re t o fi le a return) ; St ep he ns onv. Co m m is si on er, 7 48 F.2d33 1 (6 th Ci r. 19 84 ) (h ol di ng th atanin di vi du al who tu rn s o ve r hi s en ti re an nu al in co m e to a ch ur chis st il l t ax ab le on th atin co m e), aff ’g 79 T.C. 99 5 (1 98 2) ; Lo ns da le v. Co m m is si on er, 6 61 F.2d71 (5t h C ir. 1 98 1) (ho ld in g tha t the arg um en t tha t wag es (co nt in ue d...)-2 1-

[* 21 ] pe na lty , if i t i s o bjec ti ve ly “ ‘con tra ry to est ab li sh edlaw an d u ns up po rte d b y a rea so ne d, co lo rab le arg um en t fo r ch an ge inth e la w.’ ” See Tak ab a v . Co m m is si on er, 1 19 T.C. at 2 87 (qu ot in g C ol em anv. Co m m is si on er, 7 91 F.2dat 71 (no ti ng th atth is is th e st an da rdap pl ie d u nd er Ru le 11 of t he Fed eral Ru le s o f Ci vi l Pr oc edur e fo r sa nc ti on s i n c iv il li ti ga ti on )); see als o Ni s Fa m il y Trus t v . Co m m is si on er, 1 15 T.C. 52 3, 5 44 (20 00 ); C on no ll y v. Co m m is si on er, T.C. Mem o. 20 08 -9 5. Co urts ha ve im po se d the sec ti on 66 73 pe na lty wher e a t axpa y er ra is ed fri vo lo us arg um en ts . See, e.g ., Takab a v . Comm is si on er, 1 19 T.C. at 2 95 -2 96 (h ol di ng tax pa y er l iabl e fo r a s ect io n 6 67 3 p en al ty becau se tax pa y er fri vo lo us ly arg ue d tha t u nd er s ect io n 8 61 in co m e fo r se rv ic es fro m withi n the Uni te d S ta te s was no t t ax ab le ); P reco urt v . Comm is si on er, T.C. Mem o. 2 01 0- 24 (ho ld in g ta xp ay er l iabl e fo r se ct io n 6 67 3 p en al ty whe re t ax pa y er fri vo lo us ly argu edth athe di d n otrece iv e in co m e in th e “ co ns ti tu ti on al sen se ”); Cars ka do n v . Comm is si on er, (...co nt in ue d) 1 0 are n otin co m e is witho utm eri t u nd er the Co ns ti tu ti on , whi chgra nt s C on gr es s the po wer t o t ax in co m e fro m what ev er s ou rce d eri ve d, i nc lu di ng co m pe ns at io n fr om se rv ic es ), aff’g T.C. Me m o. 1 98 1- 12 2; Mo rg anv. Co m m is si on er, T.C. Mem o. 19 78 -4 01 (ho ld in g tha t the tax pay er’s fam il y tru starrang em en t, i n wh ic h h e co nv ey edth e ex cl us iv e u se of h is li fet im e se rv ic es an d the res ul ti ng co m pe ns at io n, was witho uteco no m ic real ity an d the tax pa y er re m ai ne d fu ll y ta xabl e o n the in co m e); see als o Th e Tru th Abo utFri vo lo us Tax Arg um en ts , In te rn al Rev enue Serv ic e (Ap r. 11 , 20 14 ), av ai labl e at ht tp ://www.ir s.g ov /p ub /i rs -u tl /fr iv_t ax .pd f.-2 2-

[* 22 ] T.C. Mem o. 2 00 3- 23 7 (i m po si ng a se ct io n 6 67 3 p en al ty andho ld in g ta xp ay ers ’ arg um en ts --tha t wag es are n otin co m e--f riv ol ou s wh ere t he arg um en ts were t ax de fie r rh et or ic “ba se d o n m ere s em an ti cs ” an d u ns up po rte d b y th e la w); Talm ag e v . Comm is si on er, T.C. Mem o. 1 99 6- 11 4 (i m po si ng a se ct io n 6 67 3 pe na lty wher e ta xp ay er kne w or s ho ul d h av e kno wn tha t h e was rai si ng sev eral
co m m on tax de fie r arg um en ts th atwage s ar e n otin co m e), aff ’d witho utpubl is he d op in io n, 1 01 F.3d69 5 (4 th Cir . 19 96 ). By co m paris on , th e te rm

“ gr ou nd le ss ” h as be enap pl ie d t o c as es inwhi ch th e ta xp ay er’s p os it io n i s u nf ou nd edinfact . In d et erm in in g wh ethe r a g ro un dl es s cl ai m ex is ts , th e Tax Co urt h as lo ok edto th e d ic ti on ary de fin it io n, n ot in g tha t the
wor d “ gr ou nd le ss ” li te ral ly m ean s “ ‘hav in g n o g ro un d o r fo un da ti on : l ack in g cau se or r eas on forsupp ort.’” Keati ng v. Co m m is si on er, T.C. Mem o. 1 98 5- 31 2 (quo ti ng W eb st er’s Thi rdNew Int ern at io na l Di ct io na ry Unab rid ge d) (im

po si ng a se ct io n 6 67 3 p en al ty whe re t ax pa y er fai le d t o re sp on d t o m ul ti pl e d is co ve ry reque st s wh ere e vi de nc e reque st edwas m at eri al to th e d is pu te an d the tax pa y er’s fai lu re t o re sp on d t o the di sc ov ery reque st s co ns ti tu te d a n a dm is si on of t he gr ou nd le ss na tu re o f ta xp ay er’s p os it io n) ; Ni es v. Co m m is si on er, T.C. Mem o. 19 85 -2 16 (im

po si ng a se ct io n 6 67 3 p en al ty whe re t ax pay er d idno t p le adan y jus ti ci ab le fact s i n p et it io n) ; Wedek in g v . Comm is si on er, T.C. Mem o. 1 98 4- 53 0-2 3-

[* 23 ] (im po si ng a se ct io n 6 67 3 p en al ty whe re t ax pay er d idno t p le ador o fferan y fact s i nt o the reco rd , supp orti ng th e in fere nc e th attax pay er’s p os it io n was gr ou nd le ss ). Thu s, a p os it io n i s g ro un dl es s i f itlac ks m eri t o r ha s n o ju st ic iabl e fact s i n the pe ti ti on an d n o v al idgro un d o r ba si s. See Keat in g v . Comm is si on er, T.C. Mem o. 1 98 5- 31 2; see als o C rai n v . Commis si on er, 7 37 F.2dat 1 41 8 (“ An ap pe al th atlac ks m eri t i s n otalwa y s- -o r of te n- -fri vo lo us . Howev er, * * * [th e Co urt i s] no t o bl ig edto su fferinsi le nc e th e fi li ng of b as el es s, i ns up po rtabl e ap pe al s p res en ti ng no co lo rab le cla im s o f erro r an d d es ig ne d o nl y to de lay , ob st ru ct , or i nc ap aci tate th e o pe rat io ns of t he co urts or a ny oth er g ov ern m en ta l
au th or ity ”). The Co urt m ay im po se san ct io ns if the tax pa y er s ho ul d h av e kno wn th athi s p os it io n i s g ro un dl es s. See sec . 66 73 (a)( 1) ; Co le m anv. Co m mis si on er, 79 1 F .2dat 7 1 (h ol di ng th atth e in qu iry is o bjec ti ve ); Win sl ow v . Comm is si on er, 13 9 T.C. 2 70 , 27 6 (2 01 2) ; Tak ab a v . Comm is si on er, 1 19 T.C. at 2 87 ; Co nn ol ly v. Co m m is si on er, T.C. Mem o. 2 00 8- 95
. 3. Fai lu re t o p ur su e adm in is tra ti ve rem ed ie s The Co urt h as fou ndth ata ta xp ay er fa il s t o p ur su e av ai labl e admin is tra ti ve rem ed ie s wh enth e ta xp ay er re fu se s dur in g the adm in is tra ti ve pro ces s t o re sp on d to th e Co m

m is si on er’s rea so nabl e reque st s t o s ub st an ti at e cl ai m s an d p ro vi de
reco rd s, es pe ci al ly if do in g s o wo ul d l eadto fewer d is pu te s attri al an d i f fai li ng to-2 4-

[* 24 ] do so lat er re su lt s i n i nc reas edli ti ga ti on co st s. See Edward s v . Co m m is si on er, T.C. Mem o. 2 00 3- 14 9, af f’d, 11 9 F ed . App x. 2 93 (D.C. Cir . 20 05 ). C. Ju di ci al di sc ret io n t o i m po se a sa nc ti on Whe n o ne of t he se th ree g ro un ds is est ab li sh ed(i.e ., del ay , friv ol ou sn es s o r gr ou nd le ss ne ss , or fa il ur e to purs ue adm in is tra ti ve rem ed ie s) , pen al ti es un de r se ct io n 6 67 3 a re n otau to m at ic bu t ar e im po se d a t the Co urt’s d is cret io n. Co ns eque nt ly, th e Tax Co urt i s g iv enco ns id erab le lat itud e in de te rm in in g wh ethe r to im po se a pe na lty

an d i n wh atam ou nt , inord er t o p un is h a ndde te r th e ab us e o f jud ic ia l re so ur ces . This in vo lv es anex erci se of ju dg m en t tha t ca nn otbe
m athe m at ic al ly dem on st rat ed
. To jud ge th e ap pr op ria te ne ss of i m po si ng a se ct io n 6 67 3( a)(1 ) pe na lty an d th e ap pr op ria te am ou ntof a ny pen al ty, th is Co urt h as co ns id eredan y rel ev an t fa ct s an d c irc um st an ces , in cl ud in g the fol lo win g: 1 1 The Tax C ou rt’s o pi ni on s i m po si ng pe na lt ie s u nd er s ect io n 6 67 3( a) ar e 1 1 le gi on . See, e.g ., Wnu ckv. Co m m is si on er, 1 36 T.C. 49 8; Goff v. Co m m is si on er, 13 5 T.C. 2 31 (20 10 ); Whee le r v. C omm is si on er, 1 27 T.C. 20 0; Takabav. Co m m is si on er, 1 19 T.C. 28 5 (2 00 2) ; Ni s Fam il y Trus t v . Comm is si on er, 1 15 T.C. at54 4; Ben ne ttv. Co m

m is si on er, T.C. Mem o. 2 01 4- 25 6; W al tn er v . Co m m is si on er, T.C. Mem o. 2 01 4- 35 ; Ul lo a v . Comm is si on er, T.C. Mem o. 20 10 -6 8; Prec ou rt v . Comm is si on er, T.C. Mem o. 2 01 0- 24 ; Ro dr ig ue z v . Co m m is si on er, T.C. Mem o. 2 00 9- 92 ; M is sa ll v. Co m m is si on er, T.C. Mem o. 20 08 -2 58 ; Webs te r v. C ommis si on er, T.C. Mem o. 2 00 6- 14 4; Cars ka do n v . Co m m is si on er, T.C. Mem o. 2 00 3- 23 7; Talm ag e v . Comm is si on er, T.C. Mem o. (co nt in ue d...)-2 5-

[* 25 ] 1. Pri orpro ceed in gs : Whethe r th e ta xp ay er h as rai se d fr iv ol ou s arg um en ts inpri orpro ceed in gs be fo re thi s o r ot he r co urts . A tax pay er wh o i s a

“ rep eatoff

en de r” m ay

be de se rv in g o f a g reat er p en al ty. 2. Pri orwarn in gs : Whethe r th e ta xp ay er was warn edth athi s ar gu m en ts were fr iv ol ou s an d tha t ra is in g s uc h a rg um en ts co ul d l eadto th e im po si ti on of pe na lt ie s. Su chwarn in gs m ay have co m e fro m

th e IRS , fro m

th e Co urt i n apri or cas e, orfro m

th e Co urt i n the cas e atis su e. A tax pay er wh o i gn or es or d efi es su ch
warn in gs m ay

be de se rv in g o f a g reat er p en al ty. 3. Pri orpe na lt ie s: Whe th er the tax pa y er h as pre vi ou sl y be enpe na li zed
un de r se ct io n 6 67 3. If t he pri orpe na lty di d n otde te r th e ta xp ay er fro m pe rs is ti ng in m ai nt ai ni ng fri vo lo us po si ti on s, the n ape na lty ina gr eat er am ou ntm ay

be cal le d fo r, inord er t o a ch ie ve th e eff ectof d et erre nc e. 4. Non -fri vo lo us arg um en ts : Whethe r th e ta xp ay er ra is edany no nfri vo lo us arg um en ts inad di ti on to hi s fr iv ol ou s ar gu m en ts . To be su re, “ a ta xp ay er wh o m ak es fri vo lo us arg um en ts is no t i m m un e fro m pe na lty jus t b ecau se so m e o f hi s ar gu m en ts are n otfri vo lo us ”. Hil l v . Comm is si on er, T.C. Mem o. (...co nt in ue d) 1 1 19 96 -1 14 , aff’d wit ho utpubl is he d o pi ni on , 10 1 F .3d69 5 (4 th Cir . 19 96 ). Pen al ti es are al so so m et im es im po se d u nd er s ect io n 6 67 3( a) b y ord ers , ben ch op in io ns , or s umm ary op in io ns , whi chare n otcit edas p rece de nt . See se cs . 74 59 (b ) (thi rdsen te nc e), 7 46 3( b) ; Ru le s 5 0( f), 1 52 (c).-2 6-

[* 26 ] 20 14 -1 34 , at * 16 . Howev er, a t ax pa y er wh os e o nl y arg um en ts are fr iv ol ou s
m ay be de se rv in g o f a g reat er p en al ty than atax pa y er wh o h ada bo nafid e d is pu te bu t t ack edon fri vo lo us arg um en ts . 5. Pro te st : Whethe r th e ta xp ay er m ai nt ai ne d the li ti ga ti on pri m ari ly to pr ot es t the tax laws , rathe r th anto li ti ga te hi s l iabi li ty und er tho se laws . This Co urt ex is ts to res ol ve bo nafid e d is pu te s, n otto pro vi de a ve nu e fo r co m pl ai ni ng ab ou t the set tl edtax law as th e Co ns ti tu ti onau th or iz edit , th e Co ng res s en act edit , an d the co urts ha ve ap pl ie d i t. Campaig ns to ch an ge th e ta x l aw are p ro pe rly ad dr es se d t o C on gr es s, n otth e Tax Co urt. So m eo ne who att em pt s t o wag e su cha cam pa ig n b y a po in tl es s l aws ui t m ay

be de se rv in g o f a g reat er p en al ty. 6. Am ou ntat i ss ue : Whethe r th e am ou ntof t he li ab il ity th e ta xp ay er was att em

pt in g t o a vo idor t o d el ay pay in g was subs tant ia l. The gre at er the li ab il ity , th e g reat er m ay

be th e te m

pt at io n t o fo res ta ll th e d ay of ju dg m en t b y fri vo lo us co nt en ti on s o r di la to ry tac ti cs , andth e g reat er m ay be th e ap pr op ria te pe na lty . 7. Tax pa y er’s b ack gr ou nd : Whethe r th e ta xp ay er’s educ at io n a nd
ex pe rie nc e in di cat e th athe kn ew orsh ou ldha ve kn own th atth e arg um en t h e was
m ak in g was fri vo lo us . Som eo ne with l es s educ at io n o r so ph is ti cat io n m ay be les s ab le to di sc ernfri vo lo us ne ss inanarg um en t an d l es s b la m ewo rth y if h e ad op ts-2 7-

[* 27 ] ps eu do -le ga l co nt en ti on s tha t s eem pl au si bl e to hi m ; an d, o n the othe r ha nd , so m eo ne with m or e educ at io n o r rel ev an t ex pe rie nc e m ay be de se rv in g o f a g reat er pe na lty . 8. Bu rd en : Whethe r th e ta xp ay er’s co nduc t i m po se s o n the IRS an d the Co urt a s ub st an ti al un du e b ur de n t o a dju di cat e th e ta xp ay er’s t ax li ab il ity . A ta xp ay er wh o a tt em

pt s t o d is se m

bl e o r to ob sc ur e th e g ro un dl es sn es s o f hi s ca se
m ay requi re m or e ti m e an d e ffo rt b y hi s o pp on en t an d the Co urt tha n i s re qu ire d by a lit ig an t wh o i s fo rth rig htab ou t h is po si ti on s. Lik ewis e, a ta xp ay er wh o refu se s t o c omm

un ic at e wit h h is op po ne ntor wi th th e Co urt, o r who refu se s t o adm itor t o s ti pu la te fact s tha t h e la te r is un ab le to di sp ut e, or who res is ts a well
gr ou nd edm ot io n b y

m ean s o f sh am

di sp ut es of f

actth atlat er p ro ve m eri tl es s, o r who fil es fri vo lo us m ot io ns of h is owninfurth eran ce o f hi s fr iv ol ou s ca se --s uc h a ta xp ay er co ns um es gre at er re so ur ces of t he Co urt an d o f th e Co m m is si on er an d
m ay be de se rv in g o f a g reat er p en al ty. 1 2 A li ti gant ’s im

po si ng anun du e b ur de n i n Tax Co urt p ro ceed in gs can 1 2 ag gr av at e h is li ab il ity

forpe na lty

un de r se ct io n 6 67 3( a); bu t s uc h abu rd enis no t a pr erequi si te to pe na lty

li ab il ity , no r m

us t d am ag es be sh own be fo re the pe na lty can be im po se d. Be fo re 1 98 9 s ect io n 6 67 3 p ro vi de d fo r anawardof “ da m ag es ”. In or de r to eli m in at e th e que st io n wh ethe r th is lan gu ag e m ig htrequi re a Co urt t o “ fir strece iv [e] evi de nc e o n the am ou ntof d am ag es ”, Sau ers v. Co m m is si on er, 7 71 F.2 d 6 4, 6 7 (3 d C ir. 1 98 5) , aff’g T.C. Mem o. 1 98 4- 36 7, Co ng res s amend edth e st atut e to em

pl oy the term

“pe na lty ”. See H.R. Re pt . No. 1 01 -2 47 , at 1 39 9 (1 98 9) , (co nt in ue d...)-2 8-

[* 28 ] 9. Co nduc t: W he th er the tax pay er’s co nduc t b efo re the Co urt was di srup ti ve or c on tu m aci ou s. A ta xp ay er wh o p res en ts hi s fr iv ol ou s ar gu m en ts at a
se ss io n o f th e Co urt i n a n i ns ul ti ng , un co op erat iv e, ordi srup ti ve m anne r m ay was te th e ti m e o f th e Co urt an d the othe r li ti ga nt s wh o h av e cas es to be tri edat th atses si on ; m ay

mis le ad , di st ract , or d is co ur ag e o th er t ax pa y ers ; an d m ay un de rm in e th e au th or ity

of t he Co urt. Su chco nduc t m ay be de se rv in g o f a g reat er pe na lty . 10
. Oth er h arm

to th e ta xp ay er: Whe th er the tax pa y er was alr eady ha rm edby his ownab us es . Som et im es a ta xp ay er’s fri vo lo us or d il at ory po si ti on cau se s h im

to fai l t o c la im

de du ct io ns or c red it s t o wh ic h h e wou ldothe rwis e h av e be enen ti tl ed , andth e li ab il ity ul ti m at el y

de te rm in edag ai ns t h im

m ay be gre at er th anitwou ldha ve be enif h e h adun de rta ke n t o p ro ve hi s ac tu al li ab il ity un de r th e law. If a ta xp ay er h as alr eady su ffer edsi gn ifi can t fi na nc ia l h arm by tak in g fri vo lo us po si ti on s, the Co urt m ay co ns id er wh ethe r a l es se r pe na lty wou ldbe
su ffi ci en t.
(...co nt in ue d) 1 2 19 89 U.S.C.C.A.N. 19 06 , 28 69 (“ The co m m it te e h as ex pl ic it ly cho se n t o c al l the se award s ‘pen al ti es ’, rathe r th an‘ da m ag es ’ (as un de r pr es en t l aw), so th atitis cle ar th atsp eci fic da m ag es in cu rredby the Uni te d S ta te s n eedno t b e p ro ve d b efo re the co urt m ay im po se th is pe na lty ”).-2 9-

[* 29 ] 11
. Fu tu re co m

pl ianc e: Whe th er the tax pa y er ev id en ces a cred ib le an d bo nafid e in te nt io n t o c om pl y with t ax laws inth e fu tu re. A pu rp os e o f th e se ct io n 6 67 3 p en al ty is t o d et er the m ak in g o f fri vo lo us co nt en ti on s i n the futur e an d t o e nc ou rag e fu tu re co m pl ianc e wit h the tax laws . If a ta xp ay er re tra ct s h is fri vo lo us po si ti on s an d m ak es a cred ib le un de rta ki ng (ei th er o n the reco rdat a he ari ng or i n wri ti ng inres po ns e to anord er t o s ho w cau se or i n a no th er fi li ng ) to
co m pl y with the tax laws inth e fu tu re, h e m ay m eri t s om e reduc ti on inth e am ou nt of th e p en al ty w e wou ldothe rwis e im po se . 12
. Puni ti ve an d d et erre nteffec ts : Whethe r th e p en al ty to b e im po se d i s anam ou ntap pr op ria te to puni sh th e cu rren t ab us e an d t o d et er fu tu re fri vo lo us li ti ga ti on . Becau se of t he pu ni ti ve an d d et erre ntpu rp os es of s ect io n 6 67 3, the Co urt at te m

pt s t o i m po se a pe na lty

inanam ountth atm ay

pro m ot e th os e p ur

po se s, gi ve n the cir cu m st an ces an d d is po si ti on of t he tax pa y er. The se 12 fact s ar e n ota ch eck li stth atth e Co urt h as us edor m us t u se be fo re im po si ng a pe na lty . Sin ce the Co urt m ay co ns id er an y

rel ev an t fa ct s, the re co ul d be no ex cl us iv e li st ; fa ct s an d c irc um st an ces othe r th anth os e li st edhe re m ay be
co ns id ered ; n otall of t he se fact s ar e p ert in en t i n e ve ry cas e; an d the pre se nc e o r ab se nc e o f a g iv enfactis no t d et erm in at iv e o f th e ap pr op ria te ne ss or a m ou ntof
an y pe na lty . Mor eo ve r, th e sa m e rea so ns th atm il it at e ag ai ns t d ig ni fy in g fr iv ol ou s-3 0-

[* 30 ] arg um en ts by refut at io n i n l en gt hy op in io ns , see Wnu ckv. Co m m is si on er, 13 6 T.C. at50 1- 51 3, m il it at e ag ai ns t l en gt hy dis cu ss io ns pe na li zi ng th os e arg um en ts . IV. Ana lysis Pl ai nl y , Mr. Ley sh on m ai nt ai ne d p os it io ns th atare fr iv ol ou s, wi th in th e
m ean in g o f se ct io n 6 67 3( a)(1 )(B) . W e n ow co ns id er h is cu lp ab il ity inli gh t o f th e fact s an d c irc um st an ces of thi s ca se . Altho ug h, s tri ct ly spe ak in g, thi s ca se is th e fi rs t we kno w of i n wh ic h Mr. Leysho n h im se lf wa s a p arty an d m ai nt ai ne d fr iv ol ou s p os it io ns intax li ti ga ti on , he m at eri al ly ass is te d h is wife inhe r Tax Co urt p ro ceed in gs , inwhi chat hi s p ro m pt in g s he rai se d m an y

of t he same friv ol ou s ar gu m en ts . From hi s fr on tro w sea t atth e tr ia l i n tha t ca se , Mr. Ley sh on he ardth e warn in g tha t fr iv ol ou s arg um en ts are s an ct io nabl e b y th is Co urt, an d h e sa w hi s wi fe s paredfro m th e pe na lty ; yet inth is cas e h e p ers is te d wi th su charg um en ts --i n h is pe ti ti on , inhi s res po ns e to th e IRS ’s m ot io n fo r su m m ary jud gm en t, i n h is m ot io n fo r reco ns id erat io n, an d i n h is ora l ar gu m en t atth e cal en da r cal l. Lik ewis e, Mr. Ley sh on rep eat ed ly ign or edth e Co urt’s warn in gs gi ve n i n thi s ca se , andhe
reas se rte d the same friv ol ou s ar gu m en ts on th os e m ul ti pl e o ccas io ns . Alth ou gh Mr. Leysho n h as no tra in in g o r expe rie nc e rel ev an t t o t ax law, h e kne w or s ho ul d-3 1-

[* 31 ] ha ve kn own , bec au se of h is an d h is wife ’s pas t ex pe rie nc e in th is Co urt, tha t th e arg um en ts he was m ak in g wer e subjec t t o s an ct io n. Mr . Ley sh on ’s per si st en ce in ass ert in g fr iv ol ou s t ax de fie r arg um en ts in di cat es th athe fil edth e p et it io n pr im ari ly to p ro te stth e ta x s y st em , andso far M r. Ley sh on ha s n otm ad e an y un de rtaki ng to co m

pl y with t ax laws inth e fu tu re. Inth is cas e Mr. Leysho n d id adm ithi s re cei ptof i nc om e as a factua l m at te r, an d h is fri vo lo us leg al arg um en ts di d n otrequi re d et ai le d fa ctua l i nqui ry by eith er the IRS o r th e Co urt; bu t h e crea te d b ur de ns by requ iri ng th e Co m m is si on er t o p rep are a ndfil e a m ot io n fo r su m m ary jud gm en t an d re qu iri ng th e Co urt t o ru le on th atm ot io n a ndonhi s
m ot io n fo r rec on si de rat io n, thu s co ns um in g the syste m ’s res ou rces forno go od
reas on . On the othe r ha nd , th e co m bi ne d a m ou nt s o f th e d efi ci en cy ($2 ,43 7) an d ad di ti on s t o t ax ($8 40 ) th atMr. Ley sh on was a tt em pt in g t o a vo idor d el ay

co ul d be ch arac te riz edas r el at iv el y sm al l. He fai le d t o fi le a return; bu t wh enth e IRS fo un d h im

ou t, h e was forth rig htab ou t h is fri vo lo us po si ti on s, an d h is co nduc t be fo re the Co urt was civ il . W e d o n otho ldag ai ns t M r. Ley sh on hi s m is ta ke n as se rti on th atin co m e ta x o n s el f-em pl oym en t i s a s ub ti tl e C em pl oym en t t ax no t
subjec t t o d efi ci en cy

pro cedur es (anass ert io n tha t re la te d t o abo ut80 % of t he li ab il ity ), di sc us se d abo ve inpart I . Alth ou gh th is co nt en ti onis fla tl y wron g, i t-3 2-

[* 32 ] m ay

ha ve refl ect eda ge nu in e m is un de rs tand in g o n M r. Ley sh on ’s part. Howev er, b ecau se he acco m pani edth is ass ert io n wi th co nt en ti on s tha t h e kne w or sh ou ldha ve kn own were fri vo lo us , he i m pe de d b ot h the Co m

m is si on er an d the Co urt fr om

pe rcei vi ng an d a dd res si ng hi s m is un de rs tand in g. Inad di ti on , Mr. Ley sh onap pe ars to ha ve rai se d o ne no n- fri vo lo us arg um en t: He arg ue d i n h is op po si ti on to th e Co m m is si on er’s m ot io n fo r su m m ary jud gm en t tha t the SFR p rep aredby the IRS was de fect iv e o r in ad equa te . W e as su m e itwas thi s ar gu m en t tha t p ro m pt edth e Co m

m is si on er t o c on ced e th e se ct io n 6 65 1( a)(2 ) ad di ti on to tax . (Even aft er the Co m m is si on er an no un cedth is
co nc es si on , Mr. Ley sh on co nt in ue d t o p res s thi s p oi nt , whi chha d n o fu rth er si gn ifi can ce i n thi s ca se .) Insu m , th e fac ts an d c irc um st an ces of thi s ca se --i n p art ic ul ar, the Co urt’s
ex pl ic itwarn in gs to Mr. Ley sh on an d t o h is wife , whi chhe ig no red --warr an t im po si ng a pe na lty

on Mr. Ley sh on . It i s cl ear t ha t ei th er h e kno ws h is po si ti on s are f riv ol ou s (a ndsh ou ldth eref or e b e sa nc ti on edforde li be rat iv el y ab us iv e be ha vi or ) orhe is si nc ere i n s om e m an ne r an d wi ll no t b e d is su ad edby m ere ex ho rta ti on (an d s ho ul d the refo re b e sa nc ti on edto de te r fu tu re m is be ha vi or ). See Nis Fam il y

Trus t v . Comm is si on er, 1 15 T.C. at 5 44 . Thu s, i n e ithe r ev en t the Co urt s ho ul d i m

po se a sa nc ti on .-3 3-

[* 33 ] As t o the am ount , we wil l ex erci se ou r di sc ret io n a nd , inli gh t o f th e fac ts
an d c irc um st an ces setou t ab ov e, wil l i m po se on Mr. Ley sh on a pe na lty of $ 2,0 00
. Mr. Leysho n s ho ul d re al iz e th atif i n the futur e h e co nt in ue s t o p ers is t wi th fri vo lo us li ti ga ti on (oneit he r hi s o wn b eh al f orhi s wi fe’s), the n h e wil l b e co m m un ic at in g t o the Co urt tha t a $ 2,0 00 pe na lty is in su ffi ci en t t o a ffec t h is be ha vi oran d tha t the Co urt s ho ul d i ns te adco ns id er i m po si ng a m

uc h l arg er pe na lty , up to th e m ax im

um of $ 25 ,00 0. Se e Pre co urt v . Comm is si on er, T.C. Mem o. 2 01 0- 24
. Mr. Leysho n’s m ot io n fo r rec on si de rat io n wi ll be de ni ed , th e o rd er t o s ho w cau se wil l b e m ad e ab so lu te , anda se ct io n 6 67 3( a)(1 ) pe na lty wil l b e im

po se d i n th e am ou ntof $ 2,0 00
. To re fle ctth e fo reg oi ng , An ap pr op ria te ord er an d d eci si on wil l b e en te red
.