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Neither party has requested a hearing, and we conclude that
a hearing is not necessary. Rule 232(a)(2). Accordingly, we
decide petitioner’s motion on the basis of the motion,
respondent’s notice of objection, petitioner’s response, and
exhibits submitted by both parties.
Discussion
Subject to certain limitations, the prevailing party in any
court proceeding may be awarded a judgment for reasonable
litigation costs incurred in connection with such court
proceeding. Sec. 7430(a)(2). The prevailing party must exhaust
the administrative remedies available to it within the Internal
Revenue Service, and the prevailing party must not have
unreasonably protracted any portion of the administrative or
court proceeding. See sec. 7430(b)(1), (3).
The term “prevailing party” means “any party * * * which (I)
has substantially prevailed with respect to the amount in
controversy, or (II) has substantially prevailed with respect to
the most significant issue or set of issues presented”. Sec.
7430(c)(4)(A)(i). And in the case of an individual taxpayer, the
term also means any party which had a net worth that did not
exceed $2,000,000 at the time the civil tax case proceeding was
commenced. Sec. 7430(c)(4)(A)(ii) (referring to 28 U.S.C. sec.
2412(d)(1)(B) and (2)(B)(2000)). However, a party shall not be
treated as the prevailing party if the Commissioner can establish
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Last modified: May 25, 2011