Maggie Management Company - Page 2

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               favor of P.  P and Mr. and Mrs. O took positions in the                
               State court litigation which were contrary to the                      
               positions each took in this case.  To avoid whipsaw, R                 
               took inconsistent positions against P and Mr. and Mrs.                 
               O.  When Mr. and Mrs. O conceded the principal issue in                
               their case, R conceded the issue in P's case.                          
               Thereafter, P filed a motion to recover administrative                 
               and litigation costs pursuant to sec. 7430, I.R.C.                     
                    1.  Held:  Because P commenced its case (by filing                
               a petition for redetermination) before the enactment of                
               TBR2, P bears the burden of proving that R's position                  
               was not substantially justified.                                       
                    2.  Held, further, P failed to carry its burden of                
               proof that R's administrative and litigation position                  
               was not substantially justified, and is therefore not                  
               entitled to an award of reasonable administrative and                  
               litigation costs.                                                      


               Alec Valk, Terrence J. Moore, and Joseph E. Mudd, for                  
               petitioner.                                                            
               Lisa N. Primavera, for respondent.                                     


                                       OPINION                                        
               NIMS, Judge:  This matter is before the Court on                       
          petitioner's Motion for an Award of Reasonable Litigation and               
          Administrative Costs (motion for costs) filed pursuant to Rule              
          231 and section 7430 on January 2, 1997.  Unless otherwise                  
          indicated, all Rule references are to the Tax Court Rules of                
          Practice and Procedure.  All section references are to sections             
          of the Internal Revenue Code in effect at the time the petition             
          was filed.                                                                  






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