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Discussion
Section 7430(a) authorizes the award of reasonable
litigation costs to the prevailing party in court proceedings
brought by or against the United States in connection with the
determination of income tax. In addition to being the prevailing
party, in order to receive an award of reasonable litigation
costs, a taxpayer must exhaust administrative remedies and not
unreasonably protract the court proceeding. Sec. 7430(b)(1),
(3). Unless the taxpayer satisfies all of the section 7430
requirements, we do not award costs. Minahan v. Commissioner, 88
T.C. 492, 497 (1987).
Section 7430(c)(4)(A) and (B)(i) provides that a taxpayer is
a prevailing party if (1) the taxpayer substantially prevailed
with respect to the amount in controversy or the most significant
issue or set of issues, (2) the taxpayer meets the net worth
requirements of 28 U.S.C. section 2412(d)(2)(B) (2000), and (3)
the Commissioner’s position in the court proceeding was not
substantially justified. See also sec. 301.7430-5(a), Proced. &
Admin. Regs. Although the taxpayer has the burden of proving
4(...continued)
affidavit filed pursuant to Rule 232(d) and the attached detailed
summary of costs, we conclude that the court costs and “fees paid
or incurred for the services of attorneys in connection with the
court proceeding” totaled $2,676.32. See sec. 7430(c)(1); see
also Sokol v. Commissioner, 92 T.C. 760, 767 n.12 (1989) (“The
costs incurred in seeking an award of litigation costs may be
included in the award.”).
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Last modified: May 25, 2011