Victor & Judith A. Grigoraci - Page 5

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               The parties agree that an evidentiary hearing is not                   
          required.  We base our decision on the pleadings, petitioners’              
          motion for litigation and administrative costs, petitioners’                
          supporting affidavits, and the various responses and counter-               
          responses filed by the parties.                                             
                                     Discussion                                       
          A.  Background                                                              
               Section 7430(a) allows, in specified circumstances, for an             
          award of reasonable litigation and administrative costs                     
          “incurred” in an administrative or court proceeding brought                 
          against the United States in connection with the determination of           
          any tax, interest, or penalty pursuant to the Internal Revenue              
          Code.  This award for costs is generally available only if the              
          taxpayer is the “prevailing party”, did not unreasonably protract           
          the administrative or judicial proceedings, and exhausted                   
          available administrative remedies.5  Sec. 7430(a); see sec.                 
          7430(b)(1) and (3).                                                         
               Respondent concedes that petitioners are the “prevailing               
          party” in this matter, that they did not unreasonably protract              
          the proceedings, and that they exhausted all administrative                 
          remedies.  Respondent also concedes that petitioners are entitled           
          to recover the $60 fee for filing their petition in this case.              

               5 We may award costs pursuant to sec. 7430 even though we              
          decide that the underlying case should be dismissed for lack of             
          jurisdiction.  Weiss v. Commissioner, 88 T.C. 1036 (1987).                  





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