Florida Country Clubs, Inc. - Page 17

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          in which the Government is defined as having taken a position               
          under section 7430(c)(7)).  The RRA 1998 amendment, therefore,              
          expanded the definition of “reasonable administrative costs” to             
          include costs incurred from an earlier date.  While the RRA 1998            
          amendment moves the point in time in which administrative costs             
          come within section 7430(c)(2), the RRA 1998 amendment does not             
          move the point in time in which the Government is considered to             
          have taken a position in section 7430(c)(7).  Accordingly, the              
          RRA 1998 amendment does not permit recovery of administrative               
          costs in situations where no notice of deficiency or Appeals                
          Office decision has been issued.                                            
               Our interpretation of the RRA 1998 amendment to section                
          7430(c)(2) is consistent with section 7430(c)(4).  First,                   
          paragraphs (4) and (2) of subsection (c) serve different                    
          functions in the statutory scheme governing the recovery of                 
          administrative costs.  Section 7430(c)(4) governs the                       
          determination of whether a taxpayer is a prevailing party                   
          entitled to recover administrative costs.  Section 7430(c)(2), on           
          the other hand, defines what costs are recoverable by a taxpayer            
          who otherwise qualifies as a prevailing party under section                 
          7430(c)(4).  Stated simply, if a taxpayer does not qualify as a             
          prevailing party (e.g., because the Government never took a                 
          “position” under 7430(c)(7) by issuing a notice of deficiency or            
          Appeals Office decision), he or she cannot recover any                      






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Last modified: May 25, 2011