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Section 7430 was applicable to proceedings commenced after
February 28, 1983. See TEFRA sec. 292(e)(1), 96 Stat. 574.3
The Technical and Miscellaneous Revenue Act of 1988, Pub. L.
100-647, sec. 6239, 102 Stat. 3342, 3743, amendments to section
7430 expanded the relief provided under section 7430 to allow
certain prevailing parties to recover reasonable administrative
costs in addition to litigation costs. Section 7430(a) sets
forth the general rule that the prevailing party in any
administrative or court proceeding which is brought by or against
the United States in connection with the determination,
collection, or refund of any tax, interest, or penalty may be
awarded a judgment or a settlement for reasonable administrative
costs incurred in connection with such administrative proceedings
and for reasonable litigation costs incurred in connection with
such court proceedings.
3 Sec. 7430 has been amended many times since its
enactment in 1982. The provisions of sec. 7430 applicable to a
given case depend on the date the proceeding is commenced and the
period within which the claimed costs were incurred.
Congress amended sec. 7430 in the Taxpayer Relief Act of
1997 (TRA), Pub. L. 105-34, secs. 1285, 1453, 111 Stat. 788,
1038, 1055. Congress then amended sec. 7430 in the Internal
Revenue Service Restructuring and Reform Act of 1998 (RRA 1998),
Pub. L. 105-206, sec. 3101, 112 Stat. 685, 727. The amendments
made by TRA apply in the case of proceedings commenced after Aug.
5, 1997, and the amendments made by RRA 1998 apply to costs
incurred more than 180 days after July 22, 1998 (Jan. 19, 1999).
As the petition for administrative costs herein was filed on Feb.
12, 1999, relating to costs incurred before Jan. 19, 1999, the
TRA amendments to sec. 7430 apply and not the RRA amendments.
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Last modified: May 25, 2011