Mark and Valerie Kruse - Page 9




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          attorneys in this matter is not sufficient to meet the                      
          requirements of section 7430.  See Thompson v. Commissioner, T.C.           
          Memo. 1996-468.                                                             
               Petitioners assert in their affidavits that they have paid             
          $2,972 of the fees and costs through a direct assessment of their           
          share of funds in the SEBA Plan.  To the extent that petitioners            
          paid fees and costs through direct assessment of their share of             
          the SEBA Plan, we would agree that they would have "paid and                
          incurred" litigation costs.  However, the amount of $102,659 paid           
          by the SEBA Plan as of December 30, 1998, less the $2,972                   
          allegedly paid by petitioners through direct assessment of their            
          share of the funds in the SEBA Plan, was not "paid or incurred"             
          by petitioners.  Since this amount has been paid by the SEBA                
          plan, petitioners are not liable for payment of that amount, nor            
          is there some subsequent event which would cause petitioners to             
          become liable.  In addition, the amount of petitioners'                     
          contingent liability has not yet been incurred, as explained                
          above.                                                                      
               For the aforementioned reasons, we grant respondent's motion           
          for summary judgment to the extent of the $102,659 billed and               
          paid in this matter, except to the extent petitioners have                  
          asserted that $2,972 in payments were made by them through direct           
          assessment of petitioners' share of funds in the SEBA Plan.  With           
          respect to the $2,972 in legal fees that may have been paid                 






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