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administrative costs, regardless of when such costs were
incurred.
Further, while the legislative history to the RRA 1998
amendment contains language that may be interpreted to include
the 30-day letter among the instances in which the Government
will be considered to have taken a “position”, such an
interpretation is inconsistent with the plain language of section
7430(c)(7). In addition, such an interpretation is contrary to
congressional action taken during the legislative process in
enacting the RRA 1998 amendment to section 7430.
The House and Senate reports accompanying the RRA 1998
amendment to section 7430 contain the following language:
The Committee believes that taxpayers should be
allowed to recover the reasonable administrative costs
they incur where the IRS takes a position against the
taxpayer that is not substantially justified, beginning
at the time that the IRS establishes its initial
position by issuing [the 30-day letter] * * *. S.
Rept. 105-174 at 47 (1998), 1998-3 C.B. at 537, 583; H.
Rept. 105-134 (1997), 1998-3 C.B. 373, 430.
This legislative history can be read as extending the period
for accrual of recoverable costs under section 7430(c)(2) to the
date on which the 30-day letter is sent. This legislative
history cannot be as easily read as indicating Congress’s intent
to alter the time at which the Government is considered to have
taken a section 7430(c)(7) “position” for purposes of section
7430(c)(4). Indeed, the Statement of Managers (Conference
Report) to the RRA 1998 amendment to section 7430 merely states
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