Charles F. Urbauer - Page 3

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          is a prevailing party in an administrative or court proceeding              
          brought against the United States involving the determination of            
          any tax, interest, or penalty pursuant to the Code.  Section                
          7430(c)(4)(A) requires that to be a "prevailing party", a                   
          taxpayer must establish that:  (1) The position of the United               
          States was not substantially justified; (2) the taxpayer                    
          substantially prevailed with respect to either the amount in                
          controversy or the most significant issue or set of issues                  
          presented; and (3) the taxpayer meets the net worth requirements            
          of 28 U.S.C. sec. 2412(d)(2)(B) (1994).  Section 7430(b)(1)                 
          provides that an award of litigation costs may be made only where           
          a taxpayer has exhausted available administrative remedies.  No             
          award of costs may be made with respect to any portion of an                
          administrative or judicial proceeding that the taxpayer has                 
          unreasonably protracted, sec. 7430(b)(4), and the costs claimed             
          must be reasonable in amount.  Sec. 7430(c).  Petitioner bears              
          the burden of proving each of the above requirements has been               
          satisfied.2  Rule 232(e).                                                   

               2  Sec. 7430 was amended by the Taxpayer Bill of Rights 2,             
          Pub. L. 104-168, sec. 701, 110 Stat. 1452, 1463-1464 (1996),                
          effective with respect to proceedings commenced after July 30,              
          1996.  The amendments to the section place on the Commissioner              
          the burden of establishing that the position of the Commissioner            
          was substantially justified.  Sec. 7430(c)(4)(B).  A judicial               
          proceeding is commenced in this Court with the filing of a                  
          petition.  Rule 20(a).  Petitioner filed his petition on April 6,           
          1995.  Accordingly, the amendments to sec. 7430 enacted by the              
          Taxpayer Bill of Rights 2 do not apply here.  Maggie Management             
                                                             (continued...)           




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