Laura E. Austin - Page 23

          Issue 2.  Reasonable Costs                                                  
          Recovery of Administrative Costs                                            
               Administrative costs are those costs incurred in connection            
          with an administrative proceeding within the Internal Revenue               
          Service.  Sec. 7430(a)(1), (c)(5).  Section 7430, for present               
          purposes, limits recoverable administrative costs to those                  
          incurred on or after the date of notice of deficiency and up to             
          the time the petition was filed.  Sec. 7430(c)(2); see Huffman v.           
          Commissioner, 978 F.2d at 1145.                                             
               The statement of the specific litigation and administrative            
          costs for which petitioners claim an award indicates that the               
          costs were incurred after the petitions to the Tax Court were               
          filed. Thus, none of the costs claimed by petitioners are for               
          reasonable administrative costs.                                            
          Recovery of Litigation Costs                                                
               Petitioner seeks recovery of litigation fees and costs of              
          $32,983.10 that were incurred after the petitions were filed.  We           
          must decide whether the miscellaneous costs, the number of hours            
          billed, and the rate at which those hours were billed are                   
          reasonable as claimed by petitioner.                                        
               A.   Attorney's Fees                                                   
               Petitioner submitted a statement claiming $8,188 of                    
          attorney's fees for her own time billed at an hourly rate of                
          $125.  These fees are not allowed.  Section 7430(c) operates to             
          cover actual expenditures made with regard to representation.               

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