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not send petitioners any notice of deficiency, nor did respondent
issue the reviewer’s proposal to petitioners.
During 1998 and 1999, respondent issued to each petitioner
at least three revised 30-day letters proposing adjustments to
their 1993 and 1994 reported income. Upon receipt of the final
30-day letters, petitioners protested the proposed adjustments to
respondent’s Appeals Office.
The parties settled the case sometime in April 2000, without
respondent issuing either a notice of deficiency or an Appeals
Office notice of decision. Pursuant to the settlement, the
parties agreed that petitioners owed no additional taxes for
either 1993 or 1994 and in fact were entitled to a refund for
1995.
Petitioners filed a request for administrative costs under
section 7430 with respondent, and respondent denied their request
on February 28, 2002. Consequently, petitioners timely filed
their petition with this Court on May 29, 2002, under section
7430(f) and Rule 271, for administrative costs they incurred
after January 18, 1999.3
On May 27, 2003, respondent filed a motion for summary
judgment claiming that petitioners were not entitled, as a matter
3 Jan. 18, 1999, is the effective date for the amendments to
sec. 7430(c)(2) under the Internal Revenue Service Restructuring
and Reform Act of 1998 (RRA 1998), Pub. L. 105-206, sec. 3101(b),
112 Stat. 728.
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