John F. and Tracy L. Barford, et al. - Page 5

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               This Court entered five separate Decisions pursuant to the             
          stipulated settlement agreements by the parties.  Thereafter,               
          this Court granted petitioners' motions to vacate or revise the             
          aforementioned Decisions, and petitioners' motions for award of             
          reasonable litigation costs were filed.  Respondent's notices of            
          objection to petitioners' motions for costs and a memorandum                
          were filed.  Petitioners' notices of filing additional                      
          evidentiary materials and briefs in opposition were filed.  In              
          their briefs in opposition, petitioners conceded that the                   
          litigation costs in these cases are not severable and cannot be             
          reasonably allocated between the two issues raised by                       
          petitioners.  Accordingly, we shall not so allocate.                        
               Section 7430(a) authorizes an award of reasonable                      
          litigation costs to the "prevailing party".  To qualify as a                
          prevailing party petitioners must establish: (1) That the                   
          position of the United States in the proceeding was not                     
          substantially justified; (2) that they substantially prevailed              
          with respect to the amount in controversy, or with respect to               
          the most significant issue or set of issues presented; and (3)              
          that they satisfied the net worth requirements of 28 U.S.C.                 
          section 2412(d)(2)(B) (1991) on the date each petition was                  
          filed.  Sec. 7430(c)(4)(A).  Petitioners must also establish                
          that they have exhausted the administrative remedies available              
          to them within the Internal Revenue Service, that they did not              

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