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during the years when it was accrued by the partnership because
of an oversight on the part of the accountants for the
partnership and petitioner.
In general, section 7430(a) provides for the award of
reasonable administrative and litigation costs to a taxpayer who
is a prevailing party in an administrative or court proceeding
brought against the United States involving the determination of
any tax, interest, or penalty pursuant to the Code. To be a
"prevailing party" a taxpayer must establish that: (1) The
position of the United States was not substantially justified;
(2) the taxpayer substantially prevailed with respect to either
the amount in controversy or the most significant issue or set of
issues presented; and (3) as pertinent to the instant matter, the
taxpayer met the net worth requirements of 28 U.S.C. sec.
2412(d)(2)(B) (1994) at the time the petition in the case was
filed. Sec. 7430(c)(4)(A). Additionally, an award of litigation
costs may be made only where a taxpayer has exhausted available
administrative remedies, sec. 7430(b)(1), and no award of costs
may be made with respect to any portion of an administrative or
judicial proceeding that the taxpayer has unreasonably
protracted, sec. 7430(b)(4). Moreover, the costs claimed must be
reasonable in amount. Sec. 7430(c).
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Last modified: May 25, 2011