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affg. T.C. Memo. 1998-176. Accordingly, to the extent that
petitioner is entitled to administrative or litigation fees, they
shall be at the rate respondent determined under section
7430(c)(1)(B)(iii) to be $130 per hour.2
The other disagreement between the parties concerns the
reasonableness of fees vis-a-vis the period for which fees should
be awarded. Petitioner contends that he is entitled to claim
fees from the time respondent refused to rescind the notice until
the matter of his deficiency and claim for fees and costs was
resolved. Respondent, however, contends that petitioner is
entitled to claim fees only until January 13, 2000. Most of the
fees were incurred after the parties reached an impasse and while
petitioner’s counsel prepared for trial. Respondent focuses on
the January 13 cutoff because of a January 12, 2000, letter
written by respondent’s counsel agreeing to pay the fees up to
that point, but at a $125 hourly rate instead of the $250 rate
sought by petitioner. Petitioner rejected that offer, and his
attorney continued trial preparation (preparation of stipulations
of fact, etc). It was not until January 20, 2000, that
respondent’s counsel conceded the substantive issue, leaving the
2 The parties do not contend that the 1998 amendments to
sec. 7430(c)(1)(B)(iii) warrant a different result. See sec.
3101(a) and (b), Internal Revenue Service Restructuring and
Reform Act of 1998, Pub. L. 105-206, 112 Stat. 727, 728.
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