Republic Plaza Properties Partnership, PFI Republic Limited, Inc., Tax Matters Partner - Page 7

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               PFI concedes that Pacific Harbor, and not Partnership or PFI,          
          paid all of the litigation costs at issue.  However, it asserts             
          that those litigation costs were "incurred for PFI in its capacity          
          as tax [matters] partner in bringing its Petition" (emphasis                
          added) in this case and that therefore either PFI or Partnership            
          satisfies section 7430(a)(2).  We disagree.                                 
               In addressing the meaning of the word "incurred" in the                
          context of section 7430, the Court has observed that the common             
          meaning of the word incur is "to become liable or subject to:               
          bring down upon oneself."  Frisch v. Commissioner, 87 T.C. 838,             
          846 (1986).  Fees and expenses are incurred when there is a legal           
          obligation to pay them.  See Marre v. United States, 38 F.3d 823,           
          828-829 (5th Cir. 1994); see also United States v. 122.00 Acres of          
          Land, 856 F.2d 56 (8th Cir. 1988) (applying sec. 304(a)(2) of the           
          Uniform Relocation Assistance and Real Property Acquisition                 
          Policies Act of 1970, 42 U.S.C. sec. 4654(a), Pub. L. 91-646, 84            
          Stat. 1984, 1906 (1994); attorney's fees were not actually "in-             
          curred" because the party claiming them had no legal obligation to          
          pay them); SEC v. Comserv Corp., 908 F.2d 1407, 1414-1415 (8th              
          Cir. 1990) (construing to a similar effect the Equal Access to              
          Justice Act, codified at 5 U.S.C. sec. 504 and 28 U.S.C. sec. 2412          
               On the record before us, we find that PFI has failed to                
          establish that either Partnership or PFI was legally obligated to           

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