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within the IRS, and reasonable litigation costs incurred in
connection with any court proceeding. To qualify as a prevailing
party under the statute, petitioner must establish that: (1) The
position of the United States in the proceeding was not
substantially justified; (2) she substantially prevailed with
respect to the amount in controversy or with respect to the most
significant issue presented; and (3) she met the net worth
requirements of 28 U.S.C. sec. 2412(d)(2)(B) (1994) on the date
the petition was filed. Sec. 7430(c)(4)(A).
To recover litigation costs, petitioner must also establish
that she exhausted the administrative remedies available to her
within the Internal Revenue Service and that she did not
unreasonably protract the proceedings. Sec. 7430(b)(1), (4).
Petitioner bears the burden of proof with respect to each of the
preceding requirements. Rule 232(e).
Petitioner's motion in this case seeks litigation and
administrative costs paid or incurred beginning with the
examination of the returns of petitioner and of Mr. Thompson on
which the split gifts were reported through the filing of
petitioner's reply to respondent's response to petitioner's
motion for litigation and administrative costs.
Respondent agrees in her response to petitioner's motion for
litigation and administrative costs that petitioner has
substantially prevailed with regard to the amount in controversy,
and that petitioner meets the net worth requirement.
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