Taxpayer Penalized for Wasting Court's Time

A self-employed hearing aid specialist (“petitioner”) claimed he had no taxable income and made no estimated tax payments on his 2006 and 2007 tax returns. Through third-party information returns and a bank account analysis, the IRS determined he had unreported business receipts of $209,331 for 2006 and $279,600 for 2007. After finding him liable for the deficiencies, the Tax Court judge said, “Without exception, petitioner has raised only frivolous and groundless arguments.” In addition to the tax deficiency, penalties of $30,000 were assessed for wasting the time and resources of the court.

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