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1. Applicable Hourly Rate for Attorney’s Fees
The parties dispute whether “special factors” are present
which warrant reimbursement at an hourly rate above $140.
Section 7430(c)(1)(B)(iii) provides an hourly rate for attorney’s
fees of $125, adjusted based on increases in the cost of living
since 1996. The hourly rate for 2000 and 2001 is $140. Rev.
Proc. 2001-13, sec. 3.26, 2001-1 C.B. 341; Rev. Proc. 99-42, sec.
3.26, 1999-2 C.B. 572; see Human v. Commissioner, T.C. Memo.
1998-65. That rate applies unless a special factor is present
that justifies a higher rate.
2. Whether a Special Factor Is Present
A special factor, such as the limited availability of
qualified attorneys for the proceeding, the difficulty of the
issues in the case, or the local availability of tax expertise,2
may justify payment of a higher hourly rate. Sec.
7430(c)(1)(B)(iii); Internal Revenue Service Restructuring and
Reform Act of 1998, Pub. L. 105-206, sec. 3101(a), 112 Stat. 727;
see H. Conf. Rept. 105-599, at 242-244 (1998), 1998-3 C.B. 747,
996-998; S. Rept. 105-174, at 47-49 (1998), 1998-3 C.B. 537, 583-
585; H. Rept. 105-364 (Part 1), at 57-59 (1997), 1998-3 C.B. 373,
2 There is no evidence relating to whether there is limited
availability of qualified attorneys for the proceeding or the
local availability of tax expertise, nor do petitioners make any
argument based on those factors.
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Last modified: May 25, 2011