- 9 -
Discussion
I. Overview of Section 7430
A. Relevant Provisions
Section 7430(a) provides that a taxpayer may recover certain
costs incurred in connection with any tax proceeding
(administrative or judicial) against the United States if the
taxpayer is the prevailing party in such proceeding(s). Section
7430(c)(4)(B) provides that a taxpayer shall not be treated as
the prevailing party in any such proceeding if the United States
establishes that its position in the proceeding was substantially
justified. In his objection to the motion, respondent seeks to
establish that his position in the proceedings in question was
substantially justified.
B. Position of the United States
1. Issue-by-Issue Analysis
The underlying controversy between the parties presented two
distinct issues: (1) Whether petitioners were liable for the
income tax deficiency of $36,048, and (2) whether petitioners
were liable for the section 6662(a) penalty in the amount of
$7,209.60. We ascertain the reasonableness of respondent’s
position with respect to each issue. E.g., Foothill Ranch Co.
Pship. v. Commissioner, 110 T.C. 94, 97 (1998); Mitchell v.
Commissioner, T.C. Memo. 2000-145 (separate analysis of
Commissioner’s position with respect to the income tax issue and
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Next
Last modified: May 25, 2011