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Prior to September 1, 1997, petitioners were billed for 7.2
hours of attorney time.2 Beginning September 1, 1997,
petitioners were billed a flat fee of $2,000, which represented
attorney’s fees through the period ending with the resolution of
petitioners' case in the Tax Court.
Respondent contends that the statutory rate limit of $110
should only be applied to the 7.2 hours of attorney time billed
for the period before September 1, 1997. It is respondent's
contention that petitioners should not recover attorney’s fees in
excess of $2,000 for the time period from September 1, 1997, to
the present because petitioners entered into an agreement with
counsel to limit attorney’s fees charged for this time period to
a flat fee of $2,000. Thus, respondent contends that petitioners
are entitled to total litigation costs in the amount of $2,7923
and that any additional amount would be in excess of the amount
of litigation costs allowed by section 7430.
We do not agree with respondent's contentions. Section 7430
defines reasonable litigation costs to include "reasonable fees
paid or incurred for the services of attorneys in connection with
the court proceeding, except that such fees shall not be in
2 Some of this time was charged at $275 per hour (6.9 hours)
and some of the time was charged at $165 per hour (.3 hours).
3 This amount reflects the statutory rate of $110 multiplied
by the 7.2 hours which were billed for the period prior to Sept.
1, 1997, and the $2,000 flat fee for the period beginning Sept.
1, 1997.
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