Jung Sik and Bok S. Lim - Page 2




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               All section references are to the Internal Revenue Code in             
          effect for the taxable year at issue, and all Rule references are           
          to the Tax Court Rules of Practice and Procedure, unless                    
          otherwise indicated.                                                        
               Petitioners requested an evidentiary hearing; however, after           
          considering the record and the parties’ memoranda we concluded              
          that a hearing is not necessary to reach our decision.  See Rule            
          232(a)(1).  The relevant facts are taken from the record and the            
          parties’ memoranda.  At the time the petition was filed,                    
          petitioners resided in Temple Hills, Maryland.                              
               After concessions,2 the issues for our consideration are:              
          (1) Whether respondent’s position in the litigation proceedings             
          was substantially justified; and (2) whether petitioners                    
          unreasonably protracted the proceedings.                                    


               1(...continued)                                                        
          respect to proceedings commenced after July 30, 1996.  The                  
          amendments to that section shift to the Commissioner the burden             
          of proving that the position of the United States was                       
          substantially justified, sec. 7430(c)(4)(B).                                
               A judicial proceeding is commenced in this Court with the              
          filing of a petition.  See Rule 20(a).  Petitioners filed their             
          petition on Aug. 20, 1997.  Accordingly, the 1996 amendments to             
          sec. 7430 are applicable here.  See Maggie Management Co. v.                
          Commissioner, 108 T.C. 430 (1997).                                          
               2 Respondent has conceded that petitioners substantially               
          prevailed, exhausted their administrative remedies, and met the             
          net worth requirements.  In addition, respondent conceded that              
          his position after the calendar call of May 18, 1998, was not               
          substantially justified.  Both parties agree that the hourly rate           
          at which attorney’s fees should be awarded is limited to $120 per           
          hour.                                                                       




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