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costs incurred in connection with the administrative and court
proceeding. Sec. 7430(a); Huffman v. Commissioner, 978 F.2d 1139
(9th Cir. 1992), affg. in part, revg. in part, and remanding T.C.
Memo. 1991-144; Gustafson v. Commissioner, 97 T.C. 85, 87-88
(1991). In order to be entitled to an award of reasonable
administrative or litigation costs, the moving party must
establish the following: (1) That the party is a "prevailing
party" within the meaning of section 7430(c)(4)(A); (2) that the
party did not unreasonably protract either the administrative or
court proceeding; and (3) that the administrative or litigation
costs claimed by the party are reasonable within the meaning of
section 7430(c)(1) and (2). Powers v. Commissioner, 100 T.C.
457, 469 (1993), affd. in part, revd. in part, and remanded 43
F.3d 172 (5th Cir. 1995). With respect to claims for litigation
costs, taxpayers also are required to show that administrative
remedies were exhausted. Id. at 469.
A taxpayer is a "prevailing party" in a court proceeding
only if it is established that: (1) The position of the United
States in the proceeding was not substantially justified; (2) the
taxpayer substantially prevailed with respect to the amount in
controversy or with respect to the most significant issue
presented; and (3) the taxpayer met the net worth requirements of
28 U.S.C. section 2412(d)(2)(B)(1988). Sec. 7430(c)(4)(A); Comer
Family Equity Pure Trust v. Commissioner, 958 F.2d 136, 139 (6th
Cir. 1992), affg. per curiam T.C. Memo. 1990-316; Powers v.
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