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under this title, the prevailing party may be awarded a
judgment or a settlement for--
(1) reasonable administrative costs incurred
in connection with such administrative proceeding
within the Internal Revenue Service, and
(2) reasonable litigation costs incurred in
connection with such court proceeding. [Emphasis
added.]
It is readily apparent that the underscored phrase modifies the
word "proceeding" appearing immediately before such phrase. In
this context, the word "proceeding" cannot refer to a motion for
administration and litigation costs because such a motion is not
filed in connection with the determination, collection or refund
of any tax, interest, or penalty. Rather, the word "proceeding",
as modified by the underscored phrase, must refer to the
proceeding that is commenced by the filing of a petition for
redetermination.
Likewise, section 7430(c)(1)(B)(iii) uses the word
"proceeding" in a context which cannot be limited to the filing
of a motion for costs. That section provides in relevant part as
follows: "The term 'reasonable litigation costs' includes * * *
reasonable fees paid or incurred for the services of attorneys in
connection with the court proceeding". (The term "court
proceeding" is defined in section 7430(c)(6) to mean "any civil
action brought in a court of the United States".) A motion for
litigation costs may seek an award for certain expenses connected
with the filing and prosecution of the motion, and also for
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