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(1) a deficiency in income tax due from petitioners in the amount
of $2,358; (2) a penalty due from petitioners in the amount of
$472 as provided under section 6662(a); (3) a deficiency in
income tax due from PCCL in the amount of $698 (without taking
into consideration a tentative net operating loss carryback
allowance of $1,214 from 1996); and (4) a penalty due from PCCL
in the amount of $140 as provided under section 6662(a). No
penalty was due from petitioners or PCCL for fraud as provided
under section 6663.
Petitioners and PCCL each filed a motion for an award of
reasonable litigation and administrative costs. Respondent filed
an objection to each motion. Petitioners and PCCL filed a reply
to respondent's objections. Each party submitted memoranda in
support of their respective positions. None of the parties have
requested a hearing in this matter. We conclude that a hearing
is not necessary to decide this motion. Rule 232(a)(2).
The issues for decision are: (1) Whether respondent's
position in the underlying proceedings was substantially
justified; and (2) whether the amount of costs claimed by
petitioners and PCCL with regard to the litigation and
administration costs is reasonable.
Background
The following facts are based on the entire record,
including the affidavits and exhibits submitted by the parties
and the parties' pleadings.
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