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and adopts the opinion of the Special Trial Judge that is set
forth below.
OPINION OF THE SPECIAL TRIAL JUDGE
POWELL, Special Trial Judge: This case is before the Court
on petitioner's motion, as supplemented, for an award of
reasonable litigation costs,2 pursuant to section 7430. The only
issues presented are: (1) Whether respondent's position was
substantially justified, and (2) whether, if not, the claimed
litigation costs are reasonable in amount.3
FINDINGS OF FACT
Reliable Credit Association, Inc. (Reliable or petitioner)
is a corporation engaged in the business of purchasing existing
notes and other contract receivables at a discount, thereby
realizing income over the life of the notes or receivables in the
form of interest and upon maturity or collection equal to the
discount. At the time the petition was filed, Reliable's
principal office was located in Portland, Oregon.
Respondent audited petitioner's 1991 and 1992 tax returns
and issued a notice of deficiency to petitioner. In the notice
of deficiency respondent determined that, for the taxable years
2 Petitioner does not request an award of reasonable
administrative costs. See sec. 7430(a)(1).
3 Respondent does not dispute that petitioner satisfies the
remaining elements of a claim for reasonable litigation costs.
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