- 2 -
Rule 232(a)(2). Accordingly, we rule on petitioners' motion on
the basis of the parties' submissions and the existing record.
See Rule 232(a)(1). The portions of our opinion on the merits in
the instant case, Johnson v. Commissioner, T.C. Memo. 1998-448
(Johnson I), that are relevant to our disposition of this motion
are incorporated herein by this reference.
After concessions,2 the issues for decision are: (1)
Whether petitioners are the "prevailing party" in the underlying
tax case; (2) whether petitioners unreasonably protracted the
Court's proceeding; and (3) whether the amounts of administrative
and litigation costs claimed by petitioners are reasonable.
Background
Petitioners are husband and wife. Mr. Johnson operated Ford
and Lincoln-Mercury motor vehicle dealerships. The substantive
issues in Johnson I were: (1) Whether petitioners were entitled
to defer recognition of gain on the disposition of certain
property pursuant to section 1033; (2) whether petitioners were
liable for the fraud penalty pursuant to section 6663(a), or, in
the alternative, the accuracy-related penalty pursuant to section
6662(a) for 1992; and (3) whether petitioners were liable for the
addition to tax for failure to file timely their return for 1992.
We held that (1) petitioners were entitled to defer recognition
of gain on the disposition of that property pursuant to section
1033; (2) petitioners were not liable for the fraud or accuracy-
2 Respondent concedes that petitioners exhausted their
administrative remedies and substantially prevailed.
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