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Discussion
Section 7430(a), as in effect at the time that the petition
in this case was filed, provides that in the case of any
administrative or court proceeding brought by or against the
United States in connection with the determination, collection,
or refund of any tax, interest, or penalty, the "prevailing
party" may be awarded a judgment for reasonable administrative
costs incurred in connection with any administrative proceedings
within the Internal Revenue Service (IRS) and reasonable
litigation costs incurred in connection with such court
proceedings. See sec. 7430(a), (c).
To qualify as a prevailing party under the statute,
petitioner must establish that: (1) The position of the United
States in the proceeding was not substantially justified;3 (2) he
substantially prevailed with respect to the amount in controversy
or with respect to the most significant issue presented; and (3)
he met the net worth requirement of 28 U.S.C. section
2412(d)(2)(B) on the date the petition was filed. See sec.
7430(c)(4)(A).
3 Because the proceedings in this case were commenced
before the date of enactment of the Taxpayer Bill of Rights 2,
Pub. L. 104-168, sec. 701, 110 Stat. 1452, 1463, respondent does
not bear the burden of proving that the position of the United
States was substantially justified. See Maggie Management Co. v.
Commissioner, 108 T.C. 430, 441 (1997).
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