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costs and fees pursuant to section 7430 and Rule 231.1
Petitioners do not request a hearing on this matter, and we see
no reason for a hearing. See Rule 232(a)(2). Accordingly, we
rule on petitioners' motion on the basis of the parties'
submissions and the existing record. See Rule 232(a)(1). We
incorporate by reference portions of Marten v. Commissioner, T.C.
Memo. 1999-340 (Marten I), our opinion on the merits in the
instant case, that are relevant to the disposition of the motion
before us.
After concessions,2 the issue for decision is whether
petitioners are a “prevailing party” in the underlying tax
case. Subsumed within this issue is the question of whether
respondent's position in the underlying tax case was
substantially justified.
Background
In 1953, David E. Lane (Mr. Lane) and Virginia M. Marten
(Ms. Marten) married. After legally separating in 1979, Mr. Lane
purchased a $750,000 life insurance policy on his own life and
1 Unless otherwise indicated, all section references are to
the Internal Revenue Code as amended, and all Rule references are
to the Tax Court Rules of Practice and Procedure.
2 In respondent's objection to petitioners' motion for
costs and fees, respondent concedes that: (1) Petitioners
substantially prevailed with respect to the amount in controversy
and to the most significant issue presented in the Court
proceeding, (2) petitioners have not unreasonably protracted the
litigation, and (3) petitioners exhausted their administrative
remedies available within the Internal Revenue Service.
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