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Of the total $44,559 in litigation fees and costs for which
petitioners seek recovery, petitioners calculate that $39,648 was
incurred after petitioners made their qualified offer.
OPINION
Under the general provisions of section 7430, based on the
contention that respondent’s position was not substantially
justified, petitioners seek recovery of the $44,559 in litigation
costs they incurred after respondent’s July 17, 1998, notices of
deficiency were mailed to them. Alternatively, based on their
May 5, 1999, qualified offer, petitioners seek recovery of the
$39,648 in litigation costs incurred after petitioners made their
qualified offer. We have not previously considered the qualified
offer rule of section 7430(c)(4)(E) and (g).3
3 Sec. 7430(c)(4)(E) and (g), provides in part as follows:
SEC. 7430. AWARDING OF COSTS AND CERTAIN FEES.
(c) Definitions.--For purposes of this section--
* * * * * * *
(4) Prevailing party.
* * * * * * *
(E) Special rules where judgment less than
taxpayer’s offer.
(i) In general.--A party to a court
proceeding meeting the requirements of
subparagraph (A)(ii) shall be treated as the
prevailing party if the liability of the
(continued...)
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