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Given these facts, we believe respondent was substantially
justified when respondent imputed interest income under section
482 for the two loan transactions. Because petitioners have not
proved that respondent's position on that issue was not
substantially justified, and because petitioners have conceded
that the litigation costs are not severable or allocable between
that issue and the other issue raised in their petitions (the
valuation of the RAM Drilling Stock), petitioners are not
entitled to awards of fees. Therefore, we need not reach the
other issues under section 7430.
Accordingly, petitioners' motions for award of reasonable
litigation costs are denied.
Appropriate orders and
decisions will be entered.
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Last modified: May 25, 2011