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In opposing petitioner’s recovery of administrative and
litigation costs, respondent primarily contends, however: (1)
Because petitioner did not request and participate in an Appeals
Office conference before filing her Tax Court petition, she
failed to exhaust her administrative remedies and is precluded
from recovering litigation costs under section 7430(b)(1); (2)
the position of the United States in the administrative
proceeding was substantially justified so that petitioner was not
a prevailing party in that proceeding and is not entitled to
recover administrative costs under section 7430(a)(1) and
(c)(4)(B); and (3) the position of the United States in this
judicial proceeding was substantially justified so that
petitioner was not a prevailing party in this proceeding and is
not entitled to recover litigation costs under section 7430(a)(2)
and (c)(4)(B).
Except as provided in section 7430(c)(4)(B), petitioner must
show that she meets each of the requirements of section 7430.
See Rule 232(e).
I. Exhaustion of Administrative Remedies
Section 7430(b)(1) requires that a taxpayer take advantage
of all “available” administrative remedies to be eligible for an
award of litigation costs. Haas & Associates Accountancy Corp.
v. Commissioner, 117 T.C. 48, 57 (2001), affd. 55 Fed. Appx. 476
(9th Cir. 2003); see H. Rept. 97-404, at 13 (1982) (explaining
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Last modified: May 25, 2011