- 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