Laura E. Austin - Page 2

                       MEMORANDUM FINDINGS OF FACT AND OPINION                        
               PARR, Judge:  These cases are before the Court on Laura                
          Austin's (petitioner) and Richard Hashimoto's (Hashimoto) motion            
          for administrative and litigation costs pursuant to section 7430            
          and Rule 231, filed on November 27, 1996.2  Neither party has               
          requested a hearing on petitioners' motion.  Accordingly, we rule           
          on petitioners' motion without a hearing, based on the parties'             
          submissions and the existing record.  Rule 232(a)(1).  These                
          cases were consolidated for purposes of trial, briefing, and                
          opinion.  Rule 141(a).                                                      
               After concessions by the parties, the issues for decision              
          are:  (1) Whether petitioners are the prevailing parties in the             
          underlying tax case within the meaning of section 7430(c)(4).  We           

               2    Section references are to the Internal Revenue Code in            
          effect for the year in issue.  References to section 7430 in this           
          opinion are to that section as amended by sec. 1551 of the Tax              
          Reform Act of 1986, Pub. L. 99-514, 100 Stat. 2752 (effective for           
          proceedings commenced after Dec. 31, 1985) and by sec. 6239(a) of           
          the Technical and Miscellaneous Revenue Act of 1988, Pub. L. 100-           
          647, 102 Stat. 3342, 3743-3747 (effective with respect to                   
          proceedings commenced after Nov. 10, 1988).  Section 7430 was               
          amended most recently by the Taxpayer Bill of Rights 2, Pub. L.             
          104-168, sec. 701, 110 Stat. 1452, 1463-1464 (1996), effective              
          with respect to proceedings commenced after July 30, 1996.  The             
          amendments to the section shift to the Commissioner the burden of           
          proving whether the position of the United States was                       
          substantially justified (sec. 7430(c)(4)(B)), and changed the               
          hourly rate for attorney's fees to $110 (sec.                               
          7430(c)(1)(B)(iii)).  A judicial proceeding is commenced in this            
          Court with the filing of a petition.  Rule 20(a).  Petitioners              
          filed their petition on June 3, 1994, thus these changes do not             
          apply here.  All Rule references are to the Tax Court Rules of              
          Practice and Procedure, unless otherwise indicated.  All dollar             
          amounts are rounded to the nearest dollar, unless otherwise                 

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