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transfer power (the stock transfer power). The promissory note,
stock pledge agreement, and stock transfer power are collectively
referred to as the loan documents.
The promissory note became due and payable on April 15,
2000. CareMatrix subsequently demanded payment, but petitioner
refused to pay on grounds that the promissory note was
nonrecourse and that CareMatrix held the collateral. CareMatrix
made no further collection efforts.
Respondent determined that petitioner’s default on the
promissory note resulted in cancellation of indebtedness income
of $750,000 in 2000 and that petitioner was liable for an income
tax deficiency of $277,951 and a section 6662 accuracy-related
penalty of $55,590.20 for that year. Petitioner timely
petitioned this Court for a redetermination. The parties
submitted the case fully stipulated, without trial, pursuant to
Rule 122. In Coburn I, we held that petitioner did not realize
discharge of indebtedness income in 2000 and that petitioner is
not liable for a section 6662 accuracy-related penalty. On
January 17, 2006, petitioner filed the instant motion for award
of litigation costs of $94,860.81.
Discussion
Section 7430(a) provides that a taxpayer may recover
litigation costs incurred in a court proceeding brought against
the United States in connection with the determination of a tax
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