- 2 - evidentiary hearing on this matter. See Rule 232(a)(2). Accordingly, we rule on petitioners’ motion on the basis of the parties’ submissions and the existing record. See Rule 232(a)(1). The portions of our opinion on the merits in the instant case, Schwartz v. Commissioner, T.C. Memo. 2003-86 (Schwartz I) (holding that a yacht racing activity was engaged in with an actual and honest objective of making a profit), that are relevant to our disposition of this motion are incorporated herein by this reference. After concessions,2 the issue for decision is whether petitioners are the “prevailing party” in the underlying tax case--specifically, whether respondent’s position was substantially justified. Section 7430 provides for the award of litigation costs to a taxpayer in a court proceeding brought against the United States involving the determination of any tax, interest, or penalty pursuant to the Internal Revenue Code. An award of litigation costs may be made where the taxpayer (1) is the “prevailing party”, (2) exhausted available administrative remedies, (3) did 2 Respondent concedes that petitioners substantially prevailed with respect to the most significant issue, met the net worth requirements, exhausted their administrative remedies, and did not unreasonably protract the Court proceeding. Respondent did not dispute that the costs claimed by petitioners are reasonable. Accordingly, we conclude that respondent waived this issue. See Petzoldt v. Commissioner, 92 T.C. 661, 683 (1989); Levert v. Commissioner, T.C. Memo. 1989-333, affd. without published opinion 956 F.2d 264 (5th Cir. 1992).Page: Previous 1 2 3 4 5 6 7 8 9 10 Next
Last modified: May 25, 2011