Estate of Leon Spear, Deceased, Jeannette Spear, Harvey Spear, and Robin Spear, Administrators, and Jeannette Spear - Page 6

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                                     Discussion                                       
          A.   Motion for Administrative and Litigation Costs                         
               Generally, a taxpayer who has substantially prevailed in               
          a Tax Court proceeding may be awarded reasonable administrative             
          and litigation costs.  Sec. 7430(a), (c).  To be entitled to an             
          award, the taxpayer must:                                                   
               1.  Exhaust administrative remedies.2  Sec. 7430(b)(1).                
          Respondent concedes that petitioners meet this requirement.                 
               2.   Substantially prevail with respect to the amount in               
          controversy.  Sec. 7430(c)(4)(A)(ii)(I).  Respondent concedes               
          that petitioners meet this requirement.                                     
               3.   Be an individual whose net worth did not exceed $2                
          million, or an owner of an unincorporated business, or any                  
          partnership, corporation, etc., the net worth of which did not              
          exceed $7 million, when the petition was filed.  Sec.                       
          7430(c)(4)(A)(iii); 28 U.S.C. sec. 2412(d)(2)(B) (1988).                    
          Respondent concedes that petitioners meet this requirement.                 
               4. Show that the position of the United States in the                  
          action was not substantially justified.  Sec. 7430(c)(4)(A)(i).             



               2 This requirement does not apply to an award for reasonable           
          administrative costs.  Sec. 7430(b)(1).                                     








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