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Revenue Service. Sec. 7430(b)(1). In order to exhaust
administrative remedies, section 301.7430-1(b)(2), Proced. &
Admin. Regs., requires “participation” in an Appeals conference.
The parties dispute whether petitioners’ representative
“participated” in an Appeals conference within the meaning of the
statute and regulations. The question of what constitutes
“participation” under section 7430 is one of first impression in
the context of an Appeals conference held prior to the issuance
of a notice of deficiency.
Section 7430(b)(1) contains the general requirement that
“the court * * * [must decide] that the prevailing party has
exhausted the administrative remedies available to such party
within the Internal Revenue Service.” The Secretary has
explained and interpreted the “exhaustion” requirement, as
follows:
Exhaustion of administrative remedies. (a) In
general. Section 7430(b)(1) provides that a court
shall not award reasonable litigation costs in any
civil tax proceeding under section 7430(a) unless the
court determines that the prevailing party has
exhausted the administrative remedies available to the
party within the Internal Revenue Service. This
section sets forth the circumstances in which such
administrative remedies shall be deemed to have been
exhausted.
(b) Requirements. (1) In general. A party has
not exhausted the administrative remedies available
within the Internal Revenue Service with respect to any
tax matter for which an Appeals office conference is
available under �� 601.105 and 601.106 of this chapter
(other than a tax matter described in paragraph (c) of
this section) unless–-
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Last modified: May 25, 2011