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section 7430(g). Thus, petitioner’s offer is not a qualified
offer, because it fails to meet the requirements of section
7430(g)(1)(C). Accordingly, petitioner is not entitled to
administrative or litigation costs.
Assuming arguendo that petitioner’s offer was a qualified
offer, petitioner, the prevailing party, would still not be
entitled to recover any administrative and litigation costs.
With respect to administrative costs, taxpayers who make
qualified offers, pursuant to section 7430(g), may recover only
reasonable administrative costs that are “incurred on and after
the date of such offer.” Sec. 7430(c)(4)(E)(iii)(II). In
addition, all costs incurred after the filing of a petition are
considered litigation costs. Sec. 301.7430-4(c)(3)(ii) and (4),
Example (2), Proced. & Admin. Regs. Petitioner filed his
petition in December of 2001 and made his offer to respondent in
June of 2003. Thus, even if petitioner had made a qualified
offer, he would not be awarded any reasonable administrative
costs, because it was made after he filed his petition with the
Court.
In addition, petitioner would not be entitled to litigation
costs, because he failed to exhaust all administrative remedies.
Sec. 7430(b)(1). Taxpayers cannot exhaust all administrative
remedies
unless-- (i) The party, prior to filing a petition in
the Tax Court * * * participates * * * in an Appeals
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Last modified: May 25, 2011