Kenneth C. Rathbun, et al. - Page 10

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          to the taxpayer, that is signed by an individual in the Office of           
          Appeals who has been delegated the authority to settle the                  
          dispute on behalf of the Commissioner, and states or indicates              
          that the notice is the final determination of the entire case.”             
          Sec. 301.7430-3(c)(2), Proced. & Admin. Regs. (the regulation               
          also treats a notice of claim disallowance issued by the Office             
          of Appeals as a notice of decision, but this relates to claims              
          for refund, which is not our situation).                                    
               A 30-day letter does not constitute a position of the United           
          States, and a proposed notice of deficiency, circulated within              
          the IRS and not sent to taxpayers, is not a notice of deficiency            
          for purposes of section 7430(c)(7)(B)(ii).  Fla. Country Clubs,             
          Inc. v. Commissioner, supra.                                                
          III.  Contentions of the Parties                                            
               Respondent contends that petitioners are not “prevailing               
          parties” for purposes of section 7430(c)(4) and cannot recover              
          administrative costs because the Appeals Office never took a                
          position through a notice of decision.                                      
               Petitioners maintain that the December 1995 letter sent by             
          AO Rawley was an Appeals Office notice of decision.  Petitioners            
          specifically assert that the December 1995 letter was the final             
          determination of the entire case because the document indicated             
          that the Appeals Office had completed its consideration and                 
          returned the cases to the District Director.                                






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