- 4 -
the administrative or judicial proceeding. Sec. 7430(a), (b)(1),
(3).
To be a “prevailing party”, a taxpayer must (1)
substantially prevail with respect to either the amount in
controversy or the most significant issue or set of issues
presented, and (2) meet the net worth requirements of 28 U.S.C.
section 2412(d)(2)(B). See sec. 7430(c)(4)(A)(i) and (ii). A
taxpayer will not be treated as a prevailing party, however, if
the United States established that its position was substantially
justified. See sec. 7430(c)(4)(B).
B. Substantial Justification
As we stated earlier, respondent concedes that petitioner
substantially prevailed and met the net worth requirements.
Moreover, respondent concedes that his position after the
calendar call on May 18, 1998, was not substantially justified.
The parties primarily dispute at what point in the litigation
proceedings respondent’s position was no longer substantially
justified.
Petitioners contend that respondents’ position was not
substantially justified from the time of the issuance of the
notice of deficiency. Accordingly, petitioners claim legal
expenses for the period beginning with the preparation and filing
of their petition. Respondent asserts that his position was
Page: Previous 1 2 3 4 5 6 7 8 9 Next
Last modified: May 25, 2011