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Petitioner’s attorneys represent many Hoyt investors. It is
not surprising or unreasonable that they would perform certain
legal work for the common benefit of similarly situated clients.
Under certain circumstances, it may be both efficient and
economical for an attorney to allocate the fees and costs for
legal research and other legal work benefiting several clients
equitably among those clients as long as the clients agree, the
fees and costs are reasonable, and the attorney appropriately
allocates the common legal work. See, e.g., Minahan v.
Commissioner, 88 T.C. 516 (1987), and Minahan v. Commissioner, 88
T.C. 492 (1987), in which we allocated common costs among several
taxpayers who were represented by the same attorneys under an
agreement that provided for the sharing of costs. Moreover,
legal work that benefits multiple clients is no less relevant to
an administrative or court proceeding than work performed solely
for one client. If the work is performed for multiple clients
and enables an attorney to properly represent a particular client
in the administrative or court proceeding described in section
7430, the section 7430(a) requirement that the costs for such
work are “incurred in connection with” the proceeding would
appear to be satisfied.
Petitioner’s counsel produced billing records for accounts
of two Hoyt investor client groups seeking relief from joint and
several liability to substantiate petitioner’s share of the group
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