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Code in effect for the years in issue, and all Rule references
are to the Tax Court Rules of Practice and Procedure.
Background
On their Federal income tax returns, petitioners did not
report income, relating to 1987 through 1991, from controlled
foreign corporations that operated concessionaires aboard cruise
ships (“CFC” issue); did not report income, relating to 1990,
from Marne Investments, Limited (“Marne” issue); and deducted a
loss relating to 1991 (“loss” issue). By notice dated March 12,
1997, respondent determined deficiencies, and additions to tax,
relating to these issues.
Petitioners resided in Leesburg, Florida, when they filed
the petition on June 9, 1997. Before trial, the parties settled
the case. Petitioners conceded that there was a $40,889
deficiency relating to 1990. Respondent conceded all other
issues. Petitioners thereafter filed the motion for $16,991 of
litigation costs.
Discussion
We may award litigation costs to petitioners if they meet
the statutory requirements. See sec. 7430(b)(1), (b)(3),
(c)(1)(B)(iii), (c)(4). After concessions, the remaining issues
are whether respondent’s positions relating to the Marne and loss
issues were substantially justified and whether certain fees and
other costs are reasonable.
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Last modified: May 25, 2011