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less justified between May 11, 1998, the date the proposed
settlement was rejected, and May 18, 1998. Respondent has failed
to establish that his position was substantially justified beyond
May 11, 1998, the date when the proposed settlement was rejected.
Accordingly, petitioners are entitled to attorney’s fees incurred
after May 11, 1998, when the case was forwarded from the IRS
Appeals Office to the District Counsel.
C. Unreasonable Protraction of Proceeding
Respondent contends that petitioners unreasonably protracted
the litigation proceedings, but respondent failed to provide any
examples of how petitioners acted unreasonably. Section
7430(b)(3) provides that no award of litigation costs may be made
for any portion of the proceeding that the prevailing party
unreasonably protracted. After petitioners provided respondent
with the requested information, petitioners did nothing to
protract the proceeding. Moreover, petitioners’ counsel agreed
to respondent’s proposed settlement agreement on the same day
that it was received.
D. Amount of Attorney’s Fees and Expenses To Be Awarded
Having determined when in the court proceeding respondent’s
position was no longer substantially justified, we must determine
the appropriate amount of attorney’s fees and expenses to be
awarded. Petitioners submitted a bill showing $1,023.66 of
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