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74302 and Rule 231.3 After concessions, the sole issue for
decision is whether respondent's position in the underlying
proceeding was substantially justified. We hold that it was.
Thus, Martin is not entitled to an award of litigation costs.
The parties submitted memoranda and affidavits supporting
their positions. We decide the motion based on those memoranda
and affidavits. Neither party requested a hearing. We conclude
that a hearing is not necessary to decide this motion. See Rule
232(a)(3).
Background
A. Petitioner and Martin
Petitioner Amilu S. Rothhammer (Rothhammer), formerly Amilu
S. Martin, lived in Colorado Springs, Colorado, and Martin lived
in Suffolk, Virginia, when the petition was filed. Rothhammer
and Martin invested in the Elektra/Hemisphere tax shelter in the
early 1980's and deducted amounts based on those investments.
2 Section references are to the Internal Revenue Code in
effect for the years in issue. References to sec. 7430 are to
that section as amended by sec. 1551 of the Tax Reform Act of
1986, Pub. L. 99-514, 100 Stat. 2085, 2752, effective for
proceedings which commenced after Dec. 31, 1985. A “proceeding”
under sec. 7430 commences when the petition is filed. See Maggie
Management Co. v. Commissioner, 108 T.C. 430, 438 (1997). The
petition was filed on Sept. 6, 1988. The amendments to sec. 7430
made by sec. 6239(a) of the Technical and Miscellaneous Revenue
Act of 1988, Pub. L. 100-647, 102 Stat. 3342, 3743, do not apply
here because they are first effective for proceedings commencing
after Nov. 10, 1988.
3 Rule references are to the Tax Court Rules of Practice
and Procedure.
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