- 39 -
The remaining costs of $281.64 are not clearly related to
the Diplomat issue. Therefore, we shall allow petitioners 20
percent ($56.33) of those costs.
Petitioners incurred costs $1,053 for 7.8 hours of paralegal
services billed at the rate of $135 per hour from October 8 to
December 3, 1998. This Court has awarded fees for paralegals and
law clerks.2 See Powers v. Commissioner, 100 T.C. 457, 493
(1993), revd. on other grounds 43 F.3d 172 (5th Cir. 1995);
Malamed v. Commissioner, T.C. Memo. 1993-1. Nevertheless, we
find the $135 hourly rate, which is higher than those for some of
the attorneys, unreasonable. Considering that most of the
paralegal work consisted of filing and document organization, we
reduce the hourly billing rate to $60, one-half of the attorney
rate. See, e.g., Powers v. Commissioner, supra; Pietro v.
Commissioner, T.C. Memo. 1999-383. Additionally, since the only
documents petitioners provided respondent to support the
deductions related to the Diplomat issue was a copy of their
legal argument, the paralegal work was related primarily to other
issues. Therefore, we shall allocate only 10 percent of the
paralegal time ($46.80) to the Diplomat issue.
2Counsel for petitioners included hourly fees for services
provided by a paralegal in the statement for attorney's fees. We
award attorney's fees only to attorneys as defined in sec.
7430(c)(3). See also Rules 200, 230(b)(7). We consider
paralegal fees as part of the costs or expenses but not as
attorney's fees.
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