Mark and Valerie Kruse - Page 4




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          been addressed to Mr. Gable.  As of December 30, 1998, the law              
          firm billed a total of $116,449 for services rendered, and Mr.              
          Gable paid $102,659 of that amount with assets of the SEBA Plan.            
          Mr. Gable also provided an affidavit stating the SEBA Plan is               
          funding the case, and petitioners are liable for any amounts, if            
          any, not paid by the plan.                                                  
               The parties settled all the adjustments determined in the              
          notice of deficiency.  On May 19, 1997, a stipulation of                    
          settlement was filed wherein the parties agreed that there are              
          (1) no deficiencies in income taxes owed by petitioners, nor                
          overpayment due to petitioners, and (2) that there are no                   
          penalties due from petitioners under section 6662(a) for taxable            
          years 1991, 1992, and 1993.  On the same date, petitioners filed            
          a Motion for Award of Reasonable Litigation Costs under section             
          7430 and Rule 231, seeking to recover costs in the amount of                
          $78,070, plus attorney's fees incurred during the prosecution of            
          the motion.  Respondent objected to the granting of the motion.             
               Petitioners requested a hearing on the motion, which was               
          scheduled to be held at a trial session in Tampa, Florida.  The             
          parties estimated that the hearing would require 2 or more days             
          since the issue whether respondent was substantially justified              
          would require the presentation of substantial evidence.  In lieu            
          of the hearing on petitioners’ motion for litigation costs, the             
          parties entered into a Stipulation to Be Bound, whereby the                 






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