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Petitioners now seek litigation costs of $31,078.28.1
Discussion
Section 7430(a) authorizes the award of reasonable
litigation costs to the prevailing party in court proceedings
brought by or against the United States in connection with the
determination of income tax. In order to receive an award of
reasonable litigation costs, a taxpayer must exhaust
administrative remedies and not unreasonably protract the court
proceeding, in addition to being the prevailing party. Sec.
7430(b)(1), (3). Unless the taxpayer satisfies all of the
section 7430 requirements, we do not award costs. Minahan v.
Commissioner, 88 T.C. 492, 497 (1987).
Respondent concedes that petitioners did not unreasonably
protract the court proceeding. Respondent contends, however,
that respondent’s position with respect to the issues in the
notice was substantially justified, that petitioners did not
1According to one statement in their motion for reasonable
litigation costs, petitioners “claim litigation costs of $29,800
all of which were incurred after the Statutory Notice of
Deficiency was issued on March 10, 2003”. However, in their
prayer for relief, petitioners ask that we “determine that the
award of litigation costs of $31,078.28 is reasonable”. Both the
supporting affidavit attached to the motion and petitioners’
additional affidavit filed pursuant to Rule 232(d) list costs
totaling $31,078.28. After examining the detailed summary of the
nature and amount of each item of costs, for purposes of
disposing of this motion, we conclude that the court costs and
“fees paid or incurred for the services of attorneys in
connection with the court proceeding” totaled $31,078.28. See
sec. 7430(c)(1).
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Last modified: May 25, 2011