Francesca Cappucci - Page 6

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               Section 301.7430-2(b)(1), Proced. & Admin. Regs., contains             
          seven requirements, all but one of which respondent agrees                  
          petitioner has met.  As explained above, respondent contends that           
          petitioner’s recovery is limited to costs incurred, in this case,           
          after the mailing of the notice of deficiency.                              
               Section 301.7430-2(b)(2), Proced. & Admin. Regs., is                   
          entitled “Determination by court”.  That section defines the                
          circumstances where the Court may award reasonable administrative           
          costs, but does not provide the Court with authority or a basis             
          on which to vary from the statutory limitation of reasonable                
          administrative costs incurred (in this case) after the date of              
          the notice of deficiency.  See sec. 7430(c)(2)(B).                          
               Finally, section 301.7430-3(a), Proced. & Admin. Regs.,                
          describes an “administrative proceeding generally * * * [as] any            
          procedure or other action before the Internal Revenue Service               
          that is commenced after November 10, 1988.”  That procedural                
          regulation also describes specific proceedings that are not                 
          “administrative proceedings” within the purview of section 7430.            
          Petitioner relies on the broad definition of administrative                 
          proceedings in support of her argument that she is entitled to              
          the administrative costs incurred prior to respondent’s issuance            
          of the notice of deficiency.                                                
               We are sympathetic to petitioner’s cause.  She is obviously            
          qualified to receive appropriate costs, but for the statutory               

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