- 8 -
206 (2004); Minahan v. Commissioner, 88 T.C. 492, 497 (1987).
Respondent concedes that petitioners (1) exhausted available
administrative remedies (sec. 7430(b)(1)) and (2) met the net
worth requirements (subpars. (A)(ii) and (D)(ii) of sec.
7430(c)(4)). Respondent contends that (1) petitioners are not
“the prevailing party” because (A) petitioners did not
substantially prevail (sec. 7430(c)(4)(A)(i)) and (B)
respondent’s position “was substantially justified” (sec.
7430(c)(4)(B)(i)); (2) the amount of costs petitioners claim is
not reasonable (sec. 7430(a)(2)); and (3) petitioners
“unreasonably protracted such proceedings” (sec. 7430(b)(3)).
In order to be entitled to an award of litigation costs, one
of the requirements is that petitioners have “substantially
prevailed”. Although in general the requirements for an award
are in the conjunctive, the substantially prevailed requirement
is satisfied if petitioners satisfy either one of two statutory
alternatives.
We proceed to consider first whether petitioners
substantially prevailed with respect to the most significant
issue or set of issues presented (sec. 7430(c)(4)(A)(i)(II)), and
then whether petitioners substantially prevailed with respect to
the amount in controversy (sec. 7430(c)(4)(A)(i)(I)).
A. Most Significant Issue
The parties have stipulated that they “agree that the most
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Next
Last modified: May 25, 2011