Betty W. Thompson - Page 11

                                        -11-                                          
               For the reasons stated below, we find it unnecessary to                
          address the issues of whether the position of respondent was                
          substantially justified in this matter, whether petitioner                  
          exhausted administrative remedies, and whether petitioner                   
          unreasonably protracted the Court and administrative proceedings.           
          Petitioner Must Pay or Incur Fees and Costs                                 
               Upon examination of the record in this case, we conclude               
          that petitioner has not carried her burden of proving that she              
          has paid or incurred any costs in connection with these                     
          administrative or judicial proceedings as required by statute and           
          the Rules of this Court.  Sec. 7430(a)(1) and (2) (reasonable               
          litigation and administrative costs "incurred"); Rule 231(d)                
          (reasonable litigation and administrative costs "paid or                    
          incurred").                                                                 
               In Hong v. Commissioner, 100 T.C. 88 (1993), a husband and             
          wife filed a joint Federal income tax return, were issued a joint           
          statutory notice, filed a joint petition, and had a combined net            
          worth greater than $2 million, but less than $2 million each.               
          This Court held that each petitioner met the net worth                      
          requirements of 28 U.S.C. sec. 2412(d)(2)(B) (1994), incorporated           
          into section 7430(c)(4)(A)(iii).  The latter section, we said,              
          speaks in terms of an individual.  However, an individual must              
          demonstrate that he or she has incurred or paid the costs and               
          fees for which an award is sought.  See Prager v. Commissioner,             
          T.C. Memo. 1994-420; cf. Hong v. Commissioner, supra at 92 n.2.             




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