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In his response to petitioner’s motion, respondent agrees
that (1) petitioner has substantially prevailed with respect to
the amount in controversy under section 7430(c)(4)(A)(i), (2)
petitioner meets the net worth requirements under section
7430(c)(4)(A)(ii), and (3) petitioner exhausted administrative
remedies available to him as required by section 7430(b)(1).
Respondent contends, however, that petitioner is not a prevailing
party within the meaning of section 7430(c)(4)(A) because the
position taken by respondent in this case was substantially
justified within the meaning of section 7430(c)(4)(B).
Alternatively, respondent contends that petitioner is not
entitled to the litigation costs claimed because petitioner
unreasonably protracted this litigation, the litigation costs
claimed are excessive, and the litigation costs claimed are not
adequately documented.
Discussion
In general, section 74304 provides for an award of
reasonable litigation costs to a taxpayer who: (1) Is the
prevailing party in a court proceeding brought against the United
States involving the determination of any tax, interest, or
4Sec. 7430, as most recently amended by Congress in the IRS
Restructuring and Reform Act of 1998, Pub. L. 105-206, sec. 3101,
112 Stat. 727, applies to that portion of the claimed costs
incurred after Jan. 18, 1999. Sec. 7430, as amended by the
Taxpayer Relief Act of 1997, Pub. L. 105-34, secs. 1285, 1453,
111 Stat. 1038, 1055, applies to that portion of the claimed
costs incurred on or before Jan. 18, 1999.
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