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costs attributable to services performed by individuals (e.g.,
paralegals and law clerks) under the supervision of someone who
was authorized to practice before the Court or IRS. See, e.g.,
Powers v. Commissioner, 100 T.C. 457, 492-493 (1993), affd. in
part, revd. in part and remanded 43 F.3d 172 (5th Cir. 1995).
The costs claimed by petitioner are attributable to services
performed by individuals who meet these requirements.
Accordingly, petitioner is eligible to receive an award for such
costs.
2. Reasonable Fees
Section 7430(c)(1)(B)(iii) limits the hourly rate for
attorney's fees to $75, with allowance for a higher rate for
increases in the cost of living and other special factors (e.g.,
the limited availability of qualified attorneys).
a. Special Factors
Petitioner contends that it is entitled to fees in excess of
the statutory rate because (1) petitioner's advisers had special
expertise in real estate and tax law, and (2) the prevailing rate
in the Los Angeles area exceeds $75. To qualify for a higher
statutory rate, the attorney must have tax expertise that is
necessary for the litigation in question. Pierce v. Underwood,
487 U.S. 552, 572 (1988); Huffman v. Commissioner, 978 F.2d 1139,
1149-1150 (9th Cir. 1992), affg. in part and revg. in part T.C.
Memo. 1991-144; Powers v. Commissioner, 100 T.C. at 489.
Petitioner has failed to meet this standard. In addition, the
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