Curtis and Mary Ettesvold - Page 7

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            the prevailing party.  Finally, respondent raises a factual               
            question about the fees and costs sought by petitioners.                  
                 At the outset, we note that petitioners styled their                 
            motion “Motion for Award of Reasonable Litigation and                     
            Administrative Costs”.  In fact, however, the amount sought               
            by petitioners, $5,959.87, consists entirely of attorney’s                
            fees and expenses for services in connection with the                     
            instant Tax Court proceeding.  As the affidavit attached to               
            petitioners’ motion makes clear, all of those services were               
            provided after submission of the “qualified offer”, which                 
            took place approximately 4 years after the filing of                      
            petitioners’ petition in this Court.  Thus, the attorney’s                
            fees and expenses which petitioners seek in the instant                   
            motion are litigation costs, not administrative costs.                    
            See sec. 301.7430-4(c)(3)(ii), Proced. & Admin. Regs.                     
                 We agree with respondent’s first point.  On the basis                
            of our review of this case, we cannot determine that                      
            petitioners exhausted the administrative remedies available               
            to them within the Internal Revenue Service, as required by               
            section 7430(b)(1).  In such a case, section 7430(b)(1)                   
            provides that “A judgment for reasonable litigation costs                 
            shall not be awarded under subsection (a) [of section                     
            7430]”.  See sec. 7430(b)(1).  Accordingly, we will deny                  

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