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Respondent conceded the accumulated earnings tax issue after
trial and after petitioner filed its opening brief.
Discussion
1. Motion for Litigation Costs: Introduction
Generally, a taxpayer who has substantially prevailed in a
Tax Court proceeding may be awarded reasonable litigation costs.
Sec. 7430(a)(2). To be entitled to an award, the taxpayer must:
(a) Exhaust administrative remedies. Sec. 7430(b)(1).
Respondent concedes that petitioner meets this requirement.
(b) Substantially prevail with respect to the amount in
controversy. Sec. 7430(c)(4)(A)(ii)(I). Respondent concedes
that petitioner meets this requirement.
(c) Show that the position of the United States in the
action was not substantially justified. Sec. 7430(c)(4)(A)(i)
(1988). Respondent contends that petitioner does not meet this
requirement. Petitioner contends and we hold that petitioner
meets this requirement.
(d) Be an individual whose net worth did not exceed
$2,000,000, or an owner of an unincorporated business, or any
partnership, corporation, etc., the net worth of which did
not exceed $7,000,000, when the petition was filed. Sec.
7430(c)(4)(A)(iii); 28 U.S.C. sec. 2412(d)(2)(B). Respondent
concedes that petitioner meets this requirement.
(e) Establish that the amount of costs and attorney's
fees claimed by petitioner is reasonable. Sec. 7430(a), (c)(1).
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