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exhausted his or her administrative remedies within the IRS; and
(3) did not unreasonably protract the court proceeding. Sec.
7430(a) and (b)(1), (3). Similarly, a judgment for
administrative costs incurred in connection with an
administrative proceeding may be awarded under section 7430(a)
only if a taxpayer: (1) Is the prevailing party; and (2) did not
unreasonably protract the administrative proceeding. Sec.
7430(a) and (b)(3).
A taxpayer must satisfy each of the respective requirements
in order to be entitled to an award of administrative or
litigation costs under section 7430. Rule 232(e). Upon
satisfaction of these requirements, a taxpayer may be entitled to
reasonable costs incurred in connection with the administrative
or court proceeding. See sec. 7430(a)(1) and (2), (c)(1) and
(2).
To be a “prevailing party”, the taxpayer must: (1)
Substantially prevail with respect to either the amount in
controversy or the most significant issue or set of issues
presented; and (2) satisfy the applicable net worth requirement.
Sec. 7430(c)(4)(A). A taxpayer does not qualify as the
prevailing party if the Commissioner can establish that his
position in the court and administrative proceedings was
substantially justified. Sec. 7430(c)(4)(B)(i).
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Last modified: May 25, 2011