- 11 -
7430(c)(4)(B).6 The parties dispute (1) whether the
Commissioner's position was substantially justified, and (2)
whether the amounts of costs and attorney's fees claimed by
petitioners and PCCL are reasonable.7
To decide whether respondent's position was substantially
justified, the Court must first identify the point in time at
which respondent is considered to have taken a position and then
decide whether the position taken from that date forward was
substantially justified. In general, we look separately at the
dates that respondent took a position in the administrative
proceeding and in the proceeding in this Court. Sec.
7430(c)(7)(A) and (B); Huffman v. Commissioner, 978 F.2d 1139,
6 Sec. 7430, as amended by the Taxpayer Bill of Rights 2
(TBOR 2), Pub. L. 104-168, secs. 701-704, 110 Stat. 1452, 1463-
1464 (1996), requires the Commissioner to establish that the
Commissioner's position in such proceedings was substantially
justified. TBOR 2 sec. 701(a) and (b), 110 Stat. 1463. The
amendments to sec. 7430 are effective with respect to
"proceedings commenced after * * * [July 30, 1996]". TBOR 2
secs. 701(d), 702(b), 703(b), and 704(b), 110 Stat. 1464. As the
petition in each of these cases was filed in June 1997, section
7430 as amended by TBOR 2 applies. Maggie Management Co. v.
Commissioner, 108 T.C. 430, 441 (1997). As such, the burden is
on the Commissioner to establish that the Commissioner's position
was substantially justified.
7 Respondent concedes that petitioners and PCCL have:
(1) Substantially prevailed in the proceeding within the meaning
of sec. 7430(c)(4)(A)(i); (2) exhausted their administrative
remedies within the meaning of sec. 7430(b)(1); (3) not
unreasonably protracted the Court or administrative proceedings
within the meaning of sec. 7430(b)(3); and (4) satisfied the net
worth requirements of sec. 7430(c)(4)(A)(ii).
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011