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Petitioner bears the burden of proving that she is entitled to
the claimed costs. Rule 232(e); Rutana v. Commissioner, 88 T.C.
1329, 1332 (1987). To achieve this end, petitioner must
demonstrate (1) that she has exhausted the administrative
remedies available to her within the Internal Revenue Service
(IRS), sec. 7430(b)(1), (2) that she is the prevailing party,
sec. 7430(a), and (3) that she did not unreasonably protract the
proceedings, sec. 7430(b)(4). Respondent concedes that
petitioner exhausted her administrative remedies and did not
unreasonably protract the proceedings. Therefore, to be awarded
reasonable administrative and litigation costs, petitioner must
prove that she is the prevailing party.
A prevailing party is one who (1) establishes that
respondent's position was not substantially justified; (2)
substantially prevailed with respect to the amount in contro-
versy, or with respect to the most significant issue or set of
issues presented; and (3) has a net worth which does not exceed
$2 million at the time the civil tax proceeding commences. Sec.
7430(c)(4).
Respondent argues that petitioner has not demonstrated that
she is a prevailing party within the meaning of section
7430(c)(4)(A). Specifically, respondent contends that petitioner
has not satisfied the net worth requirements pursuant to Rule
231, nor has she demonstrated that respondent's position was not
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Last modified: May 25, 2011