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After a conference call on June 21, 2002, and pursuant to an
order dated June 24, 2002, petitioners filed a supplement to
motion for allowance of claims for litigation and administrative
costs (supplement) seeking only those litigation costs incurred
after February 1, 2001, for services provided by Jeffrey A.
Schumacher, expert; Harold A. Chamberlain, lead attorney; and
Michael C. Riddle, attorney. On July 8, 2002, respondent filed
his objection to supplement to motion for allowance of claims for
litigation and administrative costs.
Discussion
The prevailing party in a Tax Court proceeding may recover
litigation costs. Sec. 7430(a); Rule 231. Except as provided in
section 7430(c)(4)(B), petitioners bear the burden of proving
that they meet each of the requirements of section 7430. Rule
232(e). Their failure to establish any one of the requirements
of section 7430 on which they have the burden of proof will
preclude an award of costs. Minahan v. Commissioner, 88 T.C.
492, 497 (1987).
Respondent contends that he was substantially justified in
challenging the valuation of Mrs. Dailey’s FLP (valuation issue).
Respondent, however, concedes he was not substantially justified
in maintaining his position that Mrs. Dailey’s FLP should be
disregarded for tax purposes (FLP issue). We must, therefore,
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