- 18 - entitled to recover reasonable litigation costs. These requirements are in the conjunctive; i.e., a taxpayer must overcome each of these hurdles in order to succeed as to litigation costs. Minahan v. Commissioner, 88 T.C. 492, 497 (1987). Respondent concedes that petitioners have satisfied all of the requirements except for the one established by section 7430(c)(4)(B)(i), relating to whether the position of the United States was substantially justified.7 As to this requirement, the statute provides, in effect, that respondent has the burden of proof. See, e.g., Maggie Management Co. v. Commissioner, 108 T.C. 430, 437-441 (1997). Respondent contends that, as of the time respondent filed the answer, (1) it was reasonable for respondent to require petitioners to substantiate their claimed deductions, (2) petitioners had not yet provided this substantiation, and (3) thus it was reasonable at that time for respondent to take the position that petitioners were not entitled to their claimed deductions. Respondent contends-- At the time of the Answer, respondent’s administrative file reflected that respondent’s Agent [Ward] was met with a set of circumstances which required prompt action and that she found herself confronted with an uncooperative representative for petitioners.3 * * * 6(...continued) (ii) the date of the notice of deficiency. 7 To avoid disputes about minutiae and the potential of ongoing costs in this Court, the parties have stipulated that if we hold that petitioners are entitled to an award of litigation costs, then the amount to be awarded, “exclusive of any litigation costs that may be incurred with respect to an appeal of this case and thereafter,” is $15,000.Page: Previous 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Next
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