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The parties are in significant disagreement, as a matter of
law, with regard to whether petitioners are entitled to recover
under section 7430 their out-of-pocket costs for mileage and
parking fees. Petitioners argue that their out-of-pocket costs
qualify as general “litigation costs” under the language of
section 7430(c)(1). Respondent argues that because petitioners’
out-of-pocket costs do not fall within any of the specific
categories of recoverable costs under section 7430(c)(1)(A)
through (B)(iii) such costs, as a matter of law, are not
recoverable.
Set forth below is the relevant language of section 7430(c):
SEC. 7430(c). Definitions.--For purposes of this
section--
(1) Reasonable litigation costs. The term
“reasonable litigation costs” includes--
(A) reasonable court costs, and
(B) based upon prevailing market rates for
the kind or quality of services furnished--
(i) the reasonable expenses of expert
witnesses * * *,
(ii) the reasonable cost of any study,
analysis, engineering report, test, or
project * * *, and
(iii) reasonable fees paid or incurred
for the services of attorneys * * *.
It is respondent’s position that mileage and parking costs
are not recoverable under section 7430(c)(1)(B)(iii) when they
were incurred by the taxpayer or by an attorney hired by the
taxpayer and included as part of the fees and costs reimbursed to
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