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Discussion
Hourly Rate
An award of litigation costs is generally "based upon
prevailing market rates for the kind or quality of services
furnished". Sec. 7430(c)(1)(B). However, the hourly rate for
attorney's fees awarded under section 7430, as in effect in this
case, is limited to $75, adjusted for increases in the cost of
living, unless an increased award is warranted to account for
"special factors". Sec. 7430(c)(1)(B)(iii). See generally
Pierce v. Underwood, 487 U.S. 552, 571-572 (1988); Powers v.
Commissioner, 43 F.3d 172, 183 (5th Cir. 1995), affg. in part,
revg. in part, and remanding in part 100 T.C. 457, 489 (1993).
Petitioner has claimed reimbursement for attorney's fees and
other litigation costs for work performed by two law firms,
Wilson & White, L.L.P. (Wilson & White) and Thompson & Knight,
P.C. (Thompson & Knight). These attorney's fees were billed at
rates ranging from $55 to $350 per hour. Petitioner claims a
total of $224,063.55. Petitioner contends that two separate
special factors justify an increased award of attorney's fees in
this case: (1) Petitioner's attorneys possessed special skills
and (2) respondent took an egregious position with respect to the
life insurance and real estate issues. Respondent contends that
the award of attorney's fees should be limited to the statutory
rate. Respondent also contends that the estate should not
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