- 17 - litigation costs incurred in a court proceeding brought by or against the United States in connection with the determination, collection, or refund of any tax, interest, or penalty under Title 26. Section 7430(c)(4) defines the term "prevailing party" in pertinent part as any party in a proceeding referred to in subsection (a) who has substantially prevailed with respect to the amount in controversy or with respect to the most significant issue or set or issues presented. Section 7430(c)(4) also provides that the prevailing party's net worth must fall within certain limitations. Petitioners do not qualify as prevailing parties within the meaning of section 7430(c)(4). Despite the Government misconduct in the trial of the test cases, we have sustained virtually all of respondent's deficiency determinations on the ground that the Government misconduct amounted to harmless error. Although we sanctioned the Government by relieving petitioners of liability for certain time-sensitive additions to tax under sections 6653(a)(2) and 6653(a)(1)(B) and increased interest under section 6621(c), petitioners have not substantially prevailed with respect to either the amount in controversy or the most significant issue or set or issues presented. See Bragg v. Commissioner, 102 T.C. 715, 719-720 (1994); Bowden v. Commissioner, T.C. Memo. 1999-30. Consequently, petitioners doPage: Previous 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Next
Last modified: May 25, 2011