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Section 7430 enables the prevailing party in any
administrative or court proceeding to recover reasonable
administrative costs incurred in the administrative proceeding
and reasonable litigation costs incurred in the court
proceeding. Sec. 7430(a); Maggie Mgmt. Co. v. Commissioner, 108
T.C. 430, 436 (1997). There are various requirements that a
party must meet to be entitled to an award for costs.
Respondent agrees that “petitioner is the prevailing party and
entitled to reasonable litigation costs only, insofar as
petitioner incurred the litigation costs claimed and did not
protract the court proceeding.”
In so agreeing, respondent has admitted that his position
was not substantially justified during the administrative and
the litigation proceedings.3 Respondent also admits that
petitioner meets the net worth requirements and that petitioner
has exhausted the administrative remedies available in
connection with the collection hearing. Accordingly, the only
questions that remain for our consideration are whether
petitioner unreasonably protracted the Tax Court proceeding and
whether petitioner’s claimed costs are reasonable.
3 We note that respondent bears the burden on this element.
Sec. 7430(c)(4)(B).
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Last modified: May 25, 2011