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settlement on all of the remaining adjustments set forth in
respondent’s notice of deficiency.
On February 11, 2002, petitioners filed under section
7430(a) their motion for an award of $12,339 in litigation costs.
OPINION
Respondent acknowledges that petitioners substantially
prevailed with respect to the adjustments set forth in
respondent’s notice of deficiency, that petitioners met the net
worth requirement, that petitioners exhausted available
administrative remedies, and that the $12,339 in claimed
litigation costs is reasonable. See sec. 7430(c)(4), (b)(1),
(c)(1), (2), and (3). Respondent contends, however, that
petitioners unreasonably protracted the administrative and court
proceedings herein and that respondent’s position was
substantially justified. See sec. 7430(b)(3) and (4).
Petitioners emphasize that they seek recovery only of
litigation costs incurred after respondent mailed the notice of
deficiency (namely, of litigation costs incurred after
December 7, 2000), and not administrative costs incurred during
the audit examination and Appeals protest when their delay in
producing records to respondent may have delayed the resolution
of the adjustments.
In connection with the audit, appeals, and litigation of
this case (from December 27, 1996, to February 2002), petitioners
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