- 30 -
In view of the foregoing, we hold that it was unreasonable
for respondent to pursue further collection after October 1,
1996.
H. Amount of Recoverable Costs
Finally, we turn to the matter concerning the amount of
recoverable costs. Here we observe that respondent concedes that
all but $150 of the costs incurred by petitioners constitutes
"reasonable litigation costs" within the meaning of sec.
7430(c)(1).18 The disputed $150 amount, however, does not
pertain to any cost incurred after September 1996. Accordingly,
we conclude that the costs incurred for the months of October
1996 through February 1997, as enumerated in petitioners'
counsel's single invoice for those months, are recoverable by
petitioners.19
III. Conclusion
Based on the foregoing, we hold that respondent's position
in the court proceeding was not unreasonable through September
1996, but that respondent acted unreasonably thereafter by not
18 See supra note 4. Further, we note that respondent
neither cites nor relies upon either sec. 301.7430-3(a)(4),
Proced. & Admin. Regs., or sec. 301.7430-3(b), Proced. & Admin.
Regs. Accordingly, no consideration is given to the possible
effect of those provisions of the regulation. Cf. Lavallee v.
Commissioner, T.C. Memo. 1997-183 at n.14; Ball v. Commissioner,
T.C. Memo. 1995-520; see also Gustafson v. Commissioner, 97 T.C.
85, 93 (1991).
19 The total amount for "services and expenses" according
to such invoice is $976.75.
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