ABC Rentals of San Antonio, Inc., et al. - Page 13




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          substantially justified.                                                    
               This Court ruled that the rent-to-own property involved in             
          these cases was not the kind of property which could be                     
          depreciated using the income forecast method of depreciation.               
          See ABC Rentals I.  That opinion was appealed to the Courts of              
          Appeals for both the Fifth Circuit and the Tenth Circuit.  While            
          the Tenth Circuit reversed and remanded, the Fifth Circuit                  
          affirmed without published opinion.  See ABC Rentals, Inc. v.               
          Commissioner, T.C. Memo. 1994-601, affd. without published                  
          opinion sub nom. El Charro TV Rental, Inc. v. Commissioner, 79              
          F.3d 1145 (5th Cir. 1996).                                                  
          III. Conclusion                                                             
               In view of the foregoing, we find and determine that the               
          position of the United States was not unreasonable and was                  
          substantially justified.  Accordingly, we hold that petitioners             
          are not entitled to administrative and litigation costs under               
          section 7430.  Based on this holding, we need not consider                  
          respondent’s alternative arguments that petitioners did not                 
          prevail on the most substantial issue or set of issues presented            
          and that the administrative and litigation costs requested by               
          petitioners are not reasonable.  Petitioners’ motion will                   
          therefore be denied.                                                        
                                             An appropriate order will be             
                                        issued.                                       
                                                                                     




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