- 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 wasPage: Previous 1 2 3 4 5 6 7 8 9 Next
Last modified: May 25, 2011