- 5 - Prevailing Party To be a "prevailing party", a taxpayer must2 (1) establish that respondent's position was not substantially justified; (2) substantially prevail with respect to either the amount in controversy or the most significant issue or set of issues presented, and (3) meet the net worth requirements of 28 U.S.C. sec. 2412(d)(2)(B). See sec. 7430(c)(4)(A)(i), (ii), and (iii). Respondent concedes that petitioners substantially prevailed with respect to the amount in controversy and the most significant issue involved in this case and met the net worth requirements. The parties dispute, however, whether respondent's position in the judicial proceeding was substantially justified. Specifically, petitioners make three arguments as to why respondent's position was not substantially justified: (1) Respondent took inconsistent positions with respect to petitioners and Frances Ryan, claiming that the payments made by petitioners were not alimony, but the payments received by 2In 1996, legislation was enacted which shifted to the Commissioner the burden of proving whether the position of the United States was substantially justified. See sec. 7430(c)(4)(B), as amended by the Taxpayer Bill of Rights 2 (TBOR 2), Pub. L. 104-168, sec. 701, 110 Stat. 1452, 1463 (1996). The changes made by this legislation apply only to proceedings commenced after July 30, 1996. TBOR 2 secs. 701(d), 702(b), 110 Stat. 1464. Since petitioners filed their petition on Jan. 22, 1996, the proceedings at issue were commenced before the effective date of TBOR 2, and the changes enacted by TBOR 2 are not applicable. See Maggie Management Co. v. Commissioner, 108 T.C. 430, 441 (1997).Page: Previous 1 2 3 4 5 6 7 8 9 Next
Last modified: May 25, 2011