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the Commissioner establishes that the Commissioner's position was
substantially justified. See sec. 7430(c)(4)(B).
Respondent contends, inter alia, that petitioners have not
satisfied the net worth requirements.
Net Worth Requirements
Rule 231(b)(4) provides that a motion for litigation or
administrative costs shall contain "A statement that the moving
party meets the net worth requirements, if applicable, of Section
2412(d)(2)(B) of title 28, United States Code (as in effect on
October 22, 1986), which statement shall be supported by an
affidavit executed by the moving party and not by counsel for the
moving party". The net worth limitation of $2 million applicable
to individuals applies separately to each taxpayer. See Hong v.
Commissioner, 100 T.C. 88 (1993); Prager v. Commissioner, T.C.
Memo. 1994-420.4 The taxpayers bear the burden of establishing
that they meet the net worth requirements. See Rule 232(e);
Dixson Intl. Serv. Corp. v. Commissioner, 94 T.C. 708, 718
(1990).
Petitioners' motion for costs contained a statement that
petitioners satisfied the net worth requirements. Petitioners
submitted an affidavit that stated their net worth was less than
$4 million jointly and $2 million individually. Petitioners also
4 The Taxpayer Relief Act of 1997, Pub. L. 105-34, sec.
1453(a), 111 Stat. 788, 1055 (effective with respect to
proceedings commenced after Aug. 5, 1997), amended sec. 7430 to
adopt this rule. See sec. 7430(c)(4)(D)(ii), as amended. The
petition in this case, however, was filed on Nov. 4, 1996;
therefore, this amendment is not applicable herein. Cf. Maggie
Management Co. v. Commissioner, 108 T.C. 430 (1997).
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