Estate of John L. Baird, Deceased, Ellen B. Kirkland and J. Samuel Baird, Co-Executors - Page 9

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          fees under section 7430(c)(1)(B)(iii), should be allowable as               
          “reasonable litigation costs” under section 7430(c)(1)(B)(ii).              
          In effect, the estates’ contention is that to the extent that the           
          Jones firm’s fees are not recoverable as attorney fees, they                
          should be allowed as expert witness fees or costs of a study,               
          analysis, engineering report, test, or project which was                    
          necessary for the preparation of the estates’ cases.                        
               We have held that the Jones firm’s fees are allowable as               
          attorney’s fees under section 7430(c)(1)(B)(iii) and that such              
          fees were limited to the adjusted statutory hourly rate.  To hold           
          that amounts in excess of the adjusted statutory hourly rate are            
          permissible under section 7430(c)(1)(B)(ii) would thwart the                
          statutory limit and circumvent the intent of that limitation.               
          Although we hold that the Jones firm’s fees were necessary to the           
          estates’ preparation and presentation of their case, they are               
          attorney fees and not recoverable as other costs associated with            
          the litigation.  In other words, the estates cannot have it both            
          ways.  We therefore hold that no portion of the Jones firm’s fees           
          that exceed the adjusted statutory hourly rate are permissible as           
          costs under section 7430(c)(1)(B)(ii).                                      
          Has There Been a Duplication of Litigation Fees?                            
               Respondent next contends that because the valuation issue              
          involved the same assets and issues in both estates, the                    
          attorney’s fees and litigation costs were duplicated.                       

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