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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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