5
(d) Be an individual whose net worth did not exceed $2
million, or an owner of an unincorporated business, or any
partnership, corporation, etc., the net worth of which did
not exceed $7 million, when the petition was filed. Sec.
7430(c)(4)(A)(iii); 28 U.S.C. sec. 2412(d)(2)(B). Respondent
concedes that petitioner meets this requirement.
(e) Establish that the amount of costs and attorney's
fees claimed is reasonable. Sec. 7430(a), (c)(1). Recoverable
attorney's fees are limited to $75 per hour adjusted for cost of
living increases and special factors. Sec. 7430(c)(1)(B)(iii).
Respondent contends that petitioner does not meet this
requirement.
A taxpayer has the burden of proving that it meets each
requirement before the Court may order an award of litigation
costs under section 7430. Rule 232(e); Estate of Johnson v.
Commissioner, 985 F.2d 1315, 1318 (5th Cir. 1993); Gantner v.
Commissioner, 92 T.C. 192, 197 (1989), affd. 905 F.2d 241 (8th
Cir. 1990); Minahan v. Commissioner, 88 T.C. 492, 497 (1987).2
2 In 1996, legislation was enacted which shifted to the
Commissioner the burden of proving whether the position of the
United States was substantially justified, sec. 7430(c)(4)(B), as
amended by the Taxpayer Bill of Rights 2 (TBR2), Pub. L. 104-168,
sec. 701, 110 Stat. 1452, 1463 (1996), and raised the hourly rate
for attorney's fees to $110, sec. 7430(c)(1)(B)(iii), as amended
by TBR2 sec. 702(a), 110 Stat. 1464. These changes do not apply
here because they are effective for proceedings commenced after
July 30, 1996. TBR2 secs. 701(d), 702(b), 110 Stat. 1464; see
National Industrial Investors, Inc. v. Commissioner, T.C. Memo.
1996-423.
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