- 33 -
United States with respect to the determination, collection, or
refund of any tax. In order for costs, including attorney’s
fees, to qualify as reasonable litigation or administrative
costs, they must come within the relevant definitions, sec.
7430(c)(1) and (2), and they must be incurred in connection with
a qualifying proceeding.
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
Page: Previous 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 NextLast modified: May 25, 2011