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Office notice of decision to the taxpayer or a notice of
deficiency as required under section 7430(c)(2). In so holding,
we rejected the taxpayer’s argument that it was unfair to apply
the flush language of section 7430(c)(2) literally where the
Commissioner admittedly erred in failing to issue a notice of
deficiency to the taxpayer before the disputed assessments.
Further, after reviewing the legislative history underlying the
TAMRA amendments, we concluded that Congress intended that the
flush language of section 7430(c)(2) protect the Commissioner
from claims by taxpayers that positions taken by the Examination
and Collection Divisions of the Internal Revenue Service, before
administrative review, were not substantially justified.4
Consistent with the plain language of section 7430(c)(2), as
well as the precept that a waiver of sovereign immunity is to be
strictly construed in favor of the sovereign, see Department of
the Army v. Blue Fox, Inc., 525 U.S. at ___, 119 S. Ct. at 691,
we hold that petitioners have failed to state a claim for
relief.5 In sum, because respondent has not issued either an
Appeals Office notice of decision or a notice of deficiency to
4 The facts in Ball v. Commissioner, T.C. Memo. 1995-520,
are substantially similar to those presented in this case, and we
are satisfied that the Court’s analysis in Ball is correct.
5 Because our holding is based on the plain language of
sec. 7430, specifically the flush language of sec. 7430(c)(2), we
need not consider petitioners’ contention that sec. 301.7430-
3(a)(4), Proced. & Admin. Regs., is invalid.
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