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administrative remedies, (3) did not unreasonably protract the
administrative or judicial proceeding, and (4) claimed reasonable
litigation costs. Sec. 7430(a), (b)(1), (3), (c). These
requirements are conjunctive. Minahan v. Commissioner, 88 T.C.
492, 497 (1987). Except as provided in section 7430(c)(4)(B),
petitioner bears the burden of proving that he meets each of the
requirements of section 7430. Rule 232(e).
To be a prevailing party, a 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) meet certain net worth requirements. Sec.
7430(c)(4)(A)(i) and (ii). However, the taxpayer is not entitled
to an award for reasonable litigation costs if the Commissioner
shows that the position of the United States in the proceeding
was substantially justified. Sec. 7430(c)(4)(B)(i).
Respondent concedes that petitioner substantially prevailed
and meets the net worth requirements. Respondent argues,
however, that petitioner is not the prevailing party because
respondent was substantially justified in maintaining his
position in the administrative and judicial proceedings.
Respondent also argues that petitioner did not exhaust all
administrative remedies, that petitioner unreasonably protracted
the proceedings, and that the fees requested are unreasonable.
We focus first on whether petitioner exhausted all available
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