3 Section 7430, as amended by the Technical and Miscellaneous Revenue Act of 1988, Pub. L. 100-647, sec. 6239, 102 Stat. 3342, 3743-3746 (applicable to proceedings commenced after November 10, 1988), provides that in any court proceeding brought by or against the United States, the "prevailing party" may be awarded reasonable litigation costs. To be a prevailing party, petitioners must establish: (1) That the position of the United States in the proceeding was not substantially justified; (2) that they substantially prevailed with respect to the amount in controversy or with respect to the most significant issue presented; and (3) that they met the net worth requirements of 28 U.S.C. section 2412(d)(2)(B)(1994) on the date the petition was filed. Sec. 7430(c)(4)(A). In addition to being the prevailing party, petitioners must establish that they exhausted the administrative remedies available to them within the Internal Revenue Service (IRS), that they did not unreasonably protract the proceeding, and that the costs claimed are reasonable. Sec. 7430(b)(1), (4), (c). Petitioners must establish all of the above elements in order to recover. See Minahan v. Commissioner, 88 T.C. 492, 497 (1987); Prager v. Commissioner, T.C. Memo. 1994-420. For purposes of petitioners' motion, respondent concedes that petitioners have exhausted their administrative remedies as required by section 7430(b)(1) and have satisfied the net worth requirement of section 7430(c)(4)(A)(iii). Respondent further concedes that petitioners have not unreasonably protracted thesePage: Previous 1 2 3 4 5 6 7 8 9 10 11 Next
Last modified: May 25, 2011