110 T.C. No. 8
UNITED STATES TAX COURT
FOOTHILL RANCH COMPANY PARTNERSHIP,
BUCK EQUITIES, LTD., TAX MATTERS PARTNER, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 26341-95. Filed February 9, 1998.
P is the tax matters partner of a partnership
comprised of four other partners. Two of the
partnership's partners are partnerships. P filed a
motion for reasonable litigation costs pursuant to sec.
7430, I.R.C., and contended that R was not
substantially justified in determining that petitioner
was not entitled, pursuant to sec. 460, I.R.C., to use
the percentage of completion method of accounting.
1. Held: R's position, relating to whether P was
entitled to use PCM, was not substantially justified.
2. Held, further, first-tier partners that meet
the net worth requirements of sec. 7430, I.R.C., are
eligible to receive an award.
3. Held, further, a partner in a TEFRA
partnership proceeding may receive an award for
litigation costs that are paid or incurred by the
partnership only to the extent such fees are allocable
to that partner.
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