- 8 -
his prior position with respect to that issue was unreasonable.
Maggie Mgmt. Co. v. Commissioner, supra at 443. However, it is a
factor that may be considered. Id.
II. Analysis
A. Characterization of the Motion
Although the motion is styled “Motion for Administration
[sic] Costs”, it references both an “administrative proceeding”
and a “Court proceeding”. In addition, the motion states that
petitioners exhausted all administrative remedies, which is a
requirement for the recovery of litigation costs. See sec.
7430(b)(1). Finally, the earliest time entry submitted by Mr.
Austen in connection with the motion is dated February 28, 2001,
the date on which petitioners filed the petition.7 We shall
therefore treat the motion as a request for litigation costs.
See, e.g., Eldridge v. Commissioner, T.C. Memo. 1996-44 n.2.
B. Respondent Established That His Position Was
Substantially Justified
Respondent established the position of the United States in
the subject judicial proceeding as of the date of his answer.
7 Because Mr. Austen dealt with respondent’s Appeals
Division on a postpetition basis, his fees relating to such
activity are properly categorized as litigation costs rather than
administrative costs. See, e.g., Han v. Commissioner, T.C. Memo.
1993-386; see also sec. 301.7430-4(c)(3) and (4), Example (2),
Proced. & Admin. Regs. (administrative costs include costs
incurred in working with Appeals up to and including the time of
the filing of the petition, but do not include (1) the costs of
preparing and filing the petition, and (2) postpetition costs).
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