- 3 - Section 7430 provides for the award of reasonable administrative and litigation costs to a taxpayer in an administrative or court proceeding brought against the United States involving the determination of any tax, interest, or penalty pursuant to the Internal Revenue Code. An award of administrative or litigation costs may be made where the taxpayer: (1) Is the prevailing party, (2) exhausted available administrative remedies,2 and (3) did not unreasonably protract the administrative or judicial proceeding. See sec. 7430(a) and (b)(1), (3). Prevailing Party To be a "prevailing party", a taxpayer must (1) substantially prevail with respect to either the amount in controversy or the most significant issue or set of issues presented, and (2) meet the net worth requirements of 28 U.S.C. sec. 2412(d)(2)(B) (1984). See sec. 7430(c)(4)(A)(i) and (ii). A taxpayer will not be treated as a prevailing party, however, if the United States establishes that its position was substantially justified. See sec. 7430(c)(4)(B). As we stated earlier, respondent concedes that petitioners substantially prevailed and met the net worth requirements. The 2This requirement does not apply to an award for reasonable administrative costs. See sec. 7430(b)(1).Page: Previous 1 2 3 4 5 6 7 8 Next
Last modified: May 25, 2011