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(holding that a nonparty could not be a "prevailing party" under
EAJA).
Respondent contends that only those persons or entities
whose tax liabilities are affected by the outcome of the
proceeding are eligible to receive an award. Because petitioner
and Hon Family Ventures, Ltd., are pass-through entities,
respondent contends that the Court should require petitioner's
and Hon Family Ventures, Ltd.'s partners to establish that they
meet the net worth requirements. Respondent further contends
that if petitioner's and Hon Family Ventures, Ltd.'s partners are
pass-through entities, the "look-through" process must continue
until it reaches a person or entity whose tax liability is
affected by the outcome of the proceeding. Respondent's proposed
"look-through rule", however, contradicts the congressional
determination that a partnership may receive litigation costs.
EAJA, 28 U.S.C. sec. 2412(d)(2)(B) (1994) (stating that a party
includes "any partnership" that meets the net worth and number of
employee requirements).
Pursuant to EAJA and the TEFRA partnership rules, we hold
that first-tier partners that meet the net worth requirements are
eligible to receive an award. Petitioner, Hon Family Ventures,
Ltd., and Hon Property Investments, Inc., have established that
they meet the net worth requirements. Accordingly, they are
prevailing parties. No evidence has been submitted relating to
the net worth of either Hon Family Trust or Hon Irrevocable
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