Larry L. Beeler and Cynthia J. Beeler - Page 5

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          per hour adjusted for inflation.  Thus, the amount of costs is              
          not in dispute.                                                             
          B.   Whether the Position of the United States Was Substantially            
               Justified                                                              
               The sole issue for decision is whether respondent's position           
          in this case was substantially justified.  A taxpayer has the               
          burden of proving that he or she meets this requirement before              
          the Court may award administrative and litigation costs under               
          section 7430.  Rule 232(e).2                                                
               1.   Position of the United States                                     
               The position of the United States is the position taken                
          by respondent:  (a) In the judicial proceeding, and (b) in the              
          administrative proceeding as of the earlier of:  (i) the date               
          the taxpayer receives the notice of the decision of the Internal            
          Revenue Service Office of Appeals, or (ii) the date of the notice           
          of deficiency.  Sec. 7430(c)(7).  Respondent determined in the              
          notice of deficiency and contended in the answer that petitioners           
          transferred assets other than land.  Thus, that is respondent's             
          position for both the administrative and the judicial                       
          proceedings.                                                                


               2 The provisions of the Taxpayer Bill of Rights 2, Pub. L.             
          104-168, sec. 701, 110 Stat. 1452, 1463-1464 (1996), which                  
          amended sec. 7430, are effective for proceedings begun after July           
          30, 1996.  The provisions of the Taxpayer Bill of Rights 2 do not           
          apply here because petitioners filed the petition in this case on           
          Sept. 6, 1994.  See Maggie Management Co. v. Commissioner, 108              
          T.C. 430, 441 (1997).                                                       




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