-6-
not entitled to business expenses, itemized deductions, and
exemptions claimed on the 2000 return. The parties now agree
that the deficiency and accuracy-related penalty are both zero.
Discussion
Petitioner moves the Court under section 7430 to award him
litigation costs of $7,893.75. We may grant this motion if he
meets all of the statutory requirements for such an award. See
sec. 7430(a), (b), and (c); Rule 232(e); see also Corson v.
Commissioner, 123 T.C. 202, 205-206 (2004); Minahan v.
Commissioner, 88 T.C. 492, 497 (1987); Han v. Commissioner, T.C.
Memo. 1993-386. The parties dispute the three requirements noted
supra pp. 1-2. We focus on the first of those requirements;
namely, that a taxpayer exhaust administrative remedies available
within the Internal Revenue Service (IRS) before petitioning this
Court as to the underlying taxable year. See sec. 7430(b)(1).
We conclude that petitioner has not met this requirement.
Section 301.7430-1(b)(1), Proced. & Admin. Regs., interprets
section 7430(b)(1) to require generally that a party participate
in an Appeals Office conference, if one is available, before
petitioning this Court with respect to the underlying year. See
Haas & Associates Accountancy Corp. v. Commissioner, 117 T.C. 48
(2001), affd. 55 Fed. Appx. 476 (9th Cir. 2003). Section
301.7430-1(e)(2), Proced. & Admin. Regs., states in relevant part
that this requirement is met, in that a party’s administrative
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