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Proced. & Admin. Regs., is invalid insofar as it conflicts with
the plain language of section 7430(a), which provides that a
taxpayer generally may be awarded a judgment or a settlement for
reasonable administrative costs incurred in "any administrative
* * * proceeding which is brought by or against the United States
in connection with the determination, collection, or refund of
any tax, interest, or penalty under this title".
This matter was called for hearing at the Court’s motions
session in Washington, D.C. Counsel for both parties appeared at
the hearing and presented argument on the pending motion.
Counsel for respondent argues that respondent’s motion
should be granted on the basis of the flush language of section
7430(c)(2) and Ball v. Commissioner, T.C. Memo. 1995-520. The
flush language of section 7430(c)(2) provides: "Such term
["reasonable administrative costs"] shall only include costs
incurred on or after the earlier of (i) the date of the receipt
by the taxpayer of the notice of the decision of the Internal
Revenue Service Office of Appeals, or (ii) the date of the notice
of deficiency." Respondent asserts that petitioners have not
incurred "reasonable administrative costs" within the meaning of
section 7430(c)(2) since petitioners have not received either an
Appeals Office notice of decision or a notice of deficiency.
Following the hearing, petitioners filed a supplemental
response asserting that, as a memorandum opinion, Ball v.
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