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pursuant to the Internal Revenue Code. An award of litigation
costs may be made where the taxpayer (1) is the “prevailing
party”, (2) has exhausted available 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). Respondent concedes that Mr. Kean
exhausted available administrative remedies and did not
unreasonably protract the administrative or judicial proceeding.
To be a prevailing party, the taxpayer must substantially
prevail with respect to either the amount in controversy or the
most significant issue or set of issues presented, and, at the
time the petition in the case is filed, the taxpayer must meet
certain net worth requirements. Sec. 7430(c)(4)(A). Section
7430(c)(4)(B) provides that a taxpayer shall not be treated as
the prevailing party in any proceeding if the United States
establishes that its position in the proceeding was substantially
justified. The position of the United States in a deficiency
proceeding in this Court is that set forth in the Commissioner’s
answer. Maggie Mgmt. Co. v. Commissioner, 108 T.C. 430, 442
(1997); see also sec. 7430(c)(7)(A).
For purposes of section 7430, a position of the United
States is substantially justified if it has a reasonable basis in
both law and fact. Maggie Mgmt. Co. v. Commissioner, supra at
443. The determination of the reasonableness of that position is
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Last modified: May 25, 2011