- 14 -
with respect to the amount in controversy or the most significant
issue or set of issues, (2) the taxpayer meets the net worth
requirements of 28 U.S.C. section 2412(d)(2)(B), and (3) the
Commissioner’s position in the court proceeding was not
substantially justified. See also sec. 301.7430-5(a), Proced. &
Admin. Regs. Although the taxpayer has the burden of proving
that she meets requirements (1) and (2), the Commissioner must
show that his position was substantially justified. Sec.
7430(c)(4)(B); Rule 232(e).
Respondent concedes that petitioner exhausted the available
administrative remedies, meets the net worth requirements of 28
U.S.C. section 2412(d)(2)(B), and did not unreasonably protract
the administrative or judicial proceedings. In addition,
respondent does not dispute that petitioner substantially
prevailed with respect to the amount in controversy. Respondent
argues, however, that petitioner is not the prevailing party
because respondent’s litigating position was substantially
justified and that the costs petitioner claims are unreasonable.
A. Whether Respondent’s Litigating Position Was Substantially
Justified
For purposes of deciding a motion for reasonable litigation
costs, a court proceeding is any civil action brought in a court
of the United States, including this Court, sec. 7430(c)(6), and
the “position of the United States” in a court proceeding is the
position taken by the Internal Revenue Service (the Service) in a
Page: Previous 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 NextLast modified: May 25, 2011