108 T.C. No. 21
UNITED STATES TAX COURT
MAGGIE MANAGEMENT COMPANY, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 8017-94. Filed June 11, 1997.
P, a California corporation, filed a petition for
redetermination before the enactment of the Taxpayer
Bill of Rights 2 (TBR2), Pub. L. 104-168, 110 Stat.
1452 (1996). Among the amendments made to sec. 7430,
I.R.C., by TBR2 was a change regarding the burden of
proof. Prior to amendment, sec. 7430, I.R.C., required
the taxpayer to prove that the Commissioner's position
in the administrative and court proceedings was not
substantially justified. Sec. 7430, I.R.C., now
requires that the Commissioner establish that the
Commissioner's position in such proceedings was
substantially justified. This amendment is effective
in the case of proceedings commenced after July 30,
1996, the date of enactment of TBR2.
P's case was consolidated for trial, briefing, and
opinion with that of Mr. and Mrs. O, with whom P had a
business relationship. The nature of this relationship
was litigated before a State court jury, which found in
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