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subsequent abandonment of the collateral by the lender would have
no Federal income tax consequences for the debtor.
Moreover, as we noted in Coburn I, Cozzi v. Commissioner, 88
T.C. 435 (1987), is of limited precedential value under the facts
of the instant case. The parties in Cozzi did not dispute
whether the abandonment of collateral results in gain on the sale
or other disposition of property or in discharge of indebtedness
income, and, consequently, the Court did not address the issue.
On the basis of the foregoing, we conclude that respondent’s
position did not have a reasonable basis in either law or fact.
Additionally, respondent failed to maintain that position with
consistency and accuracy throughout the instant proceedings.
Accordingly, we hold that, for purposes of section
7430(c)(4)(B)(i), respondent has failed to establish that
respondent’s position was substantially justified. We now turn
to our analysis of whether the amount of litigation costs
petitioner seeks is reasonable.
Reasonable Litigation Costs
“Reasonable litigation costs” include reasonable court costs
and reasonable fees paid or incurred for the services of
attorneys in connection with the court proceeding. Sec.
7430(c)(1)(A), (B)(iii). Pursuant to section 7430(c)(1), the
amount of attorney’s fees that may be awarded is limited to a
statutorily prescribed amount, as adjusted for inflation. For
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