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We first address petitioners’ contention with regard to
respondent’s alleged improper use of nontrial evidence in
opposing petitioners’ motion for litigation costs.
Nontrial Evidence
Rules 231 and 232 anticipate that evidence may be considered
in the context of a motion for litigation costs that was not part
of the trial of the underlying substantive tax issues. For
example, evidence regarding the nature and amount of the fees for
which recovery is sought (Rule 231(d)), the specific legal
services rendered (Rule 232(d)(1)), the net worth of the taxpayer
(Rule 231(b)(4)), the administrative remedies sought by the party
(Rule 231(b)(5)), and delays in the proceeding (Rule 231(b)(6)),
constitute evidence that would not typically have been admitted
as part of a trial of the underlying substantive tax issues.
Court opinions involving claims for litigation costs often
consider evidence not previously offered into evidence at the
trial of the underlying substantive tax issues. E.g., O’Bryon v.
Commissioner, T.C. Memo. 2000-379 (new evidence considered
4(...continued)
(4) Whether, under the qualified offer provisions of sec.
7430(c)(4)(E) and in analyzing whether petitioners’ tax
liabilities under our prior opinion were equal to or less
than what their tax liabilities would have been under the
qualified offer, the time value of money should be taken
into account.
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