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has been a cost of Government operations incurred for the purpose
of determining the extent of the misconduct of the Government's
lawyers. The attorney's fees and related costs that petitioners
incurred in investigating that misconduct and presenting the
matter to the Court at the evidentiary hearing are substantial
and warrant redress.
Respondent contends that an award of attorney's fees and
costs is not justified on the ground that petitioners have
already been more than adequately compensated by the sanctions
imposed upon respondent in Dixon III. We reject this contention.
The sanctions that the Court imposed in Dixon III were directed
at time-sensitive additions to tax and increased interest–-items
of liability that were indirectly compounded by the delay in the
resolution of these cases occasioned by the misconduct of the
Government's lawyers. In contrast, our decision to award
attorney's fees and costs is intended to compensate petitioners
for the additional fees and costs that they incurred as a direct
consequence of that misconduct.
In Harper v. Commissioner, supra at 552, we observed that
"Unlike an application for attorney's fees under section 7430,
there is no rate ceiling on attorney's fees imposed under section
6673(a)(2)." To the contrary, attorney's fees awarded under
section 6673(a)(2) are computed by multiplying the number of
excess hours reasonably expended on the litigation by a
reasonable hourly rate. See id. at 549. Relying on cases
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