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(4). A taxpayer must satisfy each of these three requirements in
order to be entitled to a judgment under section 7430. Rule
232(e).
I. Prevailing Party
In order to qualify as the "prevailing party", a taxpayer
must establish: (1) The position of the United States in the
proceeding was not substantially justified; (2) the taxpayer has
substantially prevailed with respect to the amount in controversy
or the most significant issue or set of issues presented; and (3)
the taxpayer satisfies the applicable net worth requirement.
Sec. 7430(c)(4)(A).
Respondent concedes that petitioner substantially prevailed
with respect to the amount in controversy. See sec.
7430(c)(4)(A)(ii)(I). However, respondent contends that the
position taken by respondent in both the administrative and court
proceedings was substantially justified. Respondent also
contends that petitioner must prove that she satisfies the
applicable net worth requirement.
A. Respondent's Position in the Administrative and Court
Proceedings
Petitioner bears the burden of proving that respondent's
position in the administrative and court proceedings was not
substantially justified. Rule 232(e); Dixson Corp. v.
Commissioner, 94 T.C. 708, 714-715 (1990); Ganter v.
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