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OPINION
We apply section 7430 as most recently amended by Congress
in the Internal Revenue Service Restructuring and Reform Act of
1998 (RRA 1998), Pub. L. 105-206, sec. 3101, 112 Stat. 685, 727.
However, the amendments made by RRA 1998 to section 7430 apply
only to costs incurred or services performed after January 18,
1999. See id. sec. 3101(g), 112 Stat. 729. To the extent the
claimed costs were incurred on or before January 18, 1999, we
shall apply section 7430 as amended by the Taxpayer Relief Act of
1997, Pub. L. 105-34, secs. 1285, 1453, 111 Stat. 1038, 1055.
Requirements Under Section 7430
Under section 7430(a), a judgment for litigation costs
incurred in connection with a court proceeding may be awarded
only if a taxpayer: (1) Is the "prevailing party"; (2) has
exhausted his or her administrative remedies within the IRS;
and (3) did not unreasonably protract the court proceeding.
Sec. 7430(a) and (b)(1), (3). Similarly, a judgment for
administrative costs incurred in connection with an
administrative proceeding may be awarded under section 7430(a)
only if a taxpayer: (1) Is the "prevailing party"; and (2) did
not unreasonably protract the administrative proceeding. Sec.
7430(a) and (b)(3).
A taxpayer must satisfy each of the respective requirements
in order to be entitled to an award of litigation or
administrative costs under section 7430. See Rule 232(e). Upon
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Last modified: May 25, 2011