Sanctions Imposed Against Taxpayer’s Counsel Killer Advice!
Sanctions Imposed Against Taxpayer’s Counsel – Actual Cases And Explanations.
Powell v. Commissioner, T.C. Memo. 2009-174, 98 T.C.M. (CCH) 56 (2009) – the court imposed sanctions against the taxpayer in the amount of $25,000 and against the taxpayer’s attorney in the amount of $4,725 for making frivolous arguments and delaying the proceedings.Takaba v. Commissioner, 119 T.C. 285, 295 (2002) – the court rejected the taxpayer’s argument that income received from sources within the United States is not taxable income stating that “[t]he 861 argument is contrary to established law and, for that reason, frivolous.” The court imposed sanctions against the taxpayer in the amount of $15,000, as well as sanctions against the taxpayer’s attorney in the amount of $10,500, for making such groundless arguments.The Nis Family Trust v. Commissioner, 115 T.C. 523, 545-46 (2000) – concluding that the petitioners chose “to pursue a strategy of noncooperation and delay, undertaken behind a smokescreen of frivolous tax-protester arguments,” the court imposed a $25,000 penalty against them, and also imposed sanctions of more than $10,600 against their attorney for arguing frivolous positions in bad faith.Edwards v. Commissioner, T.C. Memo. 2002-169, 84 T.C.M. (CCH) 24, 42 (2002), aff’d, 119 Fed. Appx. 293 (D.C. Cir. 2005) – the court found that sanctions were appropriate against both the taxpayer and the taxpayer’s attorney for making groundless arguments. The court stated that “[a]n attorney cannot advance frivolous arguments to this Court with impunity, even if those arguments were initially developed by the client.” In a supplemental opinion, the court imposed sanctions against the taxpayer in the amount of $24,000 and against the taxpayer’s attorney in the amount of $13,050. Edwards v. Commissioner, T.C. Memo. 2003-149, 85 T.C.M. (CCH)1357.