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motion for litigation costs under section 7430 and Rules 230
through 233. Petitioner claimed litigation costs of $60 for the
Tax Court filing fee.
The underlying issues raised in the petition were settled by
a stipulation of settled issues. At the time the petition was
filed, petitioner resided in Streator, Illinois.
By notice of deficiency, respondent determined a deficiency
in petitioner's Federal income tax of $735 for the taxable year
1996. Respondent conceded that there was no deficiency in income
tax due from petitioner.
Under section 7430, a taxpayer may be awarded a judgment for
reasonable litigation costs if the taxpayer establishes certain
criteria and if the Commissioner’s position was not substantially
justified. Respondent contends that his position was
substantially justified. Respondent concedes that petitioner has
satisfied the other requirements of section 7430.
In 1995, petitioner was involved in a labor dispute with his
employer. In July 1996, the employer sent petitioner a check in
the gross amount of $4,889.98, which netted out to $3,000 after
withholding and payroll deductions. The payment was designated
as a final settlement of all claims against his employer arising
out of petitioner's termination of employment. Petitioner
refused to accept the check because he did not want to give up
his right to pursue legal remedies against his former employer.
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