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requirement of sec. 7430(c)(4)(B)); and Barbour v. Commissioner,
T.C. Memo. 2000-256; Marten v. Commissioner, T.C. Memo. 2000-186;
Johnson v. Commissioner, T.C. Memo. 1999-127; Miller v.
Commissioner, T.C. Memo. 1999-55; Bowden v. Commissioner, T.C.
Memo. 1999-30 (each of which involves the “substantially
prevailed” requirement); and Barford v. Commissioner, T.C. Memo.
1998-26 (involving the net worth requirement of sec.
7430(c)(4)(A)(ii)).
Petitioners contend that submission of their qualified offer
itself constituted a part of respondent’s administrative process,
that their qualified offer demonstrates their good-faith
participation in that process, and that at the least with respect
to the $39,648 in litigation costs incurred after the date on
which they submitted their qualified offer, their earlier failure
to ask for an Appeals Office conference should not be fatal.
Petitioners have cited no persuasive authority in support of
the contention that the existence of their qualified offer makes
up for their failure to take advantage of significant
administrative remedies available to them, and we have found
nothing in the statutory provisions or elsewhere that suggests
that the exhaustion-of-administrative-remedies requirement is to
be regarded as fully satisfied because a taxpayer, 6 weeks before
trial, makes a qualified offer.
Regardless of whether petitioners’ qualified offer may be
regarded as some level of participation by petitioners in
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