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D. Meaning of “Incurred”
Awards of costs and fees under section 7430(a) are limited
to administrative costs “incurred” and reasonable litigation
costs “incurred”. In this context, the word “incur” carries its
ordinary meaning: “to become liable or subject to: bring down
upon oneself.” Frisch v. Commissioner, 87 T.C. 838, 846 (1986)
(holding that an attorney acting pro se was ineligible to receive
attorney’s fees because he “did not become liable to another
person for attorney fees nor did he bring down upon himself any
debt”); see also Corrigan v. United States, 27 F.3d 436, 438-439
(9th Cir. 1994); United States v. McPherson, 840 F.2d 244 (4th
Cir. 1988); Andary-Stern v. Commissioner, T.C. Memo. 2002-212;
Austin v. Commissioner, T.C. Memo. 1997-157. “Fees and expenses
are incurred when there is a legal obligation to pay them.”
Republic Plaza Props. Pship. v. Commissioner, T.C. Memo. 1997-239
(holding that the petitioning tax matters partner had failed to
establish a legal obligation to pay any of the litigation costs
at issue); see also Kruse v. Commissioner, T.C. Memo. 1999-157
(holding that the taxpayers had not incurred liabilities for
fees and costs for which they were contingently liable).
All the costs for which petitioners seek an award (except
for the filing fees) represent charges for professional services
provided by GTWP administrative personnel and for estimated
miscellaneous expenses associated with those services.
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Last modified: May 25, 2011