- 4 - filed an Objection to Motion for Litigation Costs. On September 29, 2004, petitioner filed Petitioner’s Response to Respondent’s Objection to Motion for Litigation Costs. Discussion The prevailing party in a Tax Court proceeding may recover litigation costs. Sec. 7430(a); Rule 231. Petitioner bears the burden of proving that he substantially prevailed and meets each requirement of section 7430. Rule 232(e). Petitioner, however, will not be treated as the prevailing party if respondent establishes that respondent’s position was substantially justified (i.e., had a reasonable basis in law and fact). Sec. 7430(c)(4)(B); see Pierce v. Underwood, 487 U.S. 552, 565 (1988). Respondent’s position both before and after the filing of a petition is relevant in determining whether respondent was substantially justified. Comer Family Equity Pure Trust v. Commissioner, 958 F.2d 136 (6th Cir. 1992), affg. T.C. Memo. 1990-316. The fact that respondent loses an issue is not determinative of the reasonableness of respondent’s position. Wasie v. Commissioner, 86 T.C. 962, 969 (1986). Prior to, and after the petition was filed, respondent based his position on the following: (1) Petitioner was convicted, pursuant to section 7206(1), of filing false income tax returns; (2) petitioner substantially underreported his income for 5 consecutive tax years; (3) petitioner paid civil fraud penaltiesPage: Previous 1 2 3 4 5 Next
Last modified: May 25, 2011