- 17 -
Discussion
I. Introduction
A. Overview of Section 7430
Section 7430 provides that, subject to certain conditions, a
taxpayer who prevails against the Government in any Federal tax
proceeding (administrative or judicial) may recover reasonable
costs, including attorney’s fees, paid or incurred in connection
with such proceeding if the Government’s position in the
proceeding was not substantially justified. Sec. 7430(a),
(c)(1)(B)(iii), (c)(4)(A) and (B). In its report accompanying
the bill in which section 7430 originated, the House Committee on
Ways and Means contemplated that such fee awards “will enable
individual taxpayers to vindicate their rights regardless of
their economic circumstances.” H. Rept. 97-404, at 11 (1981).
A taxpayer seeking litigation costs under section 7430 must
have exhausted all available administrative remedies prior to
litigation, must not have unreasonably protracted the
proceedings, and, if an individual, must not have had a net worth
in excess of $2 million as of the filing date of the suit. Sec.
7430(b)(1), (b)(3), (c)(4)(A)(ii); see 28 U.S.C. sec.
2412(d)(2)(B)(i) (1988) (individual net worth limitation
14(...continued)
(EAJA fee application included legal assistant fees; no
discussion of the issue). Although legal assistant and paralegal
fees do not fit neatly within the category of either “attorney’s
fees” or “expenses”, we follow petitioners’ lead in grouping them
with attorney’s fees.
Page: Previous 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 NextLast modified: May 25, 2011