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administrative remedies,5 (3) did not unreasonably protract the
administrative or judicial proceeding, and (4) claimed reasonable
administrative and litigation costs. See sec. 7430(a), (b)(1),
(4), (c). These requirements are conjunctive, and failure to
satisfy any one will preclude an award of costs to petitioners.
See Minahan v. Commissioner, 88 T.C. 492, 497 (1987).
To be a “prevailing party”, a taxpayer must show that (1)
the position of the United States in the proceeding was not
substantially justified, (2) the taxpayer substantially prevailed
with respect to the amount in controversy or with respect to the
most significant issue(s) presented, and (3) the taxpayer
satisfied the net worth requirement. See sec. 7430(c)(4).6
After concessions,7 the issues for decision are: (1) Whether
the position of the United States in the proceeding was not
substantially justified; (2) whether petitioners substantially
prevailed with respect to the most significant issues presented;8
5This requirement does not apply to an award for reasonable
administrative costs. See sec. 7430(b)(1).
6See supra note 2.
7Respondent has conceded that petitioners satisfied the net
worth requirement, that petitioners have exhausted available
administrative remedies, and that petitioners have not
unreasonably protracted the court or the administrative
proceedings.
8Because petitioners do not assert that they have
substantially prevailed with respect to the amount in
controversy, we do not address this issue.
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