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named Ms. Marten the owner and beneficiary of the policy. In
Marten I, the issue was whether Mr. Lane's payments of the life
insurance premiums were alimony includable by Ms. Marten in gross
income and deductible by Mr. Lane. We held that under section
71, before amendment by the Deficit Reduction Act of 1984
(DEFRA), Pub. L. 98-369, sec. 422(a), 98 Stat. 795 (pre-DEFRA
section 71), the premium payments were alimony and includable in
Ms. Marten's gross income and deductible by Mr. Lane.
Discussion
Section 7430 provides for the award of administrative and
litigation costs to a taxpayer in an administrative or court
proceeding brought against the United States involving the
determination of any tax, interest, or penalty pursuant to the
Internal Revenue Code. An award of administrative or litigation
costs may be made where the taxpayer (1) is the “prevailing
party”, (2) exhausted available administrative remedies,3 (3) did
not unreasonably protract the administrative or judicial
proceeding, and (4) claimed reasonable administrative and
litigation costs. Sec. 7430(a), (b)(1), (3), and (c). These
requirements are conjunctive, and failure to satisfy any one will
preclude an award of costs to petitioners. See Minahan v.
Commissioner, 88 T.C. 492, 497 (1987).
3 This requirement applies only to litigation costs. See
sec. 7430(b)(1).
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Last modified: May 25, 2011