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attorney misconduct that marred the test case trial by charging
him the full amount of petitioners’ attorney’s fees relating to
the Tax Court proceedings necessitated by that misconduct,
subject only to the requirement that such amounts have been
reasonably incurred.21 Because that misconduct did not extend to
the appellate proceedings, petitioners are relegated to the
applicable fee-shifting provision--section 7430, with its hourly
rate cap and eligibility requirements--with regard to their
appellate fee requests.22 Cf. Hutto v. Finney, 437 U.S. 678, 689
& n.13, 693 & n.21 (1978) (Court separately analyzes fee awards
ordered by the District Court and the Court of Appeals,
respectively; whereas the trial court’s award was adequately
supported by its finding of bad faith, the appellate court’s
award, not supported by any finding of bad faith at the appellate
level, could only be sustained under the Civil Rights Attorneys
21 Specifically, sec. 6673(a)(2)(B) provides that, whenever
respondent’s attorneys have unreasonably and vexatiously
multiplied proceedings in this Court, the Court may require the
United States to pay the excess attorney’s fees and other
litigation costs reasonably incurred because of such conduct.
Although we imposed substantial percentage reductions in our fee
awards under sec. 6673(a)(2) in Dixon IV, those reductions were
attributable to counsel’s various failures to substantiate their
claims in their entirety.
22 We note further that (1) sec. 6673(a)(2) by its terms
appears to be limited to Tax Court proceedings, and (2) inasmuch
as petitioners filed their appellate fee requests with the Court
of Appeals under sec. 7430, our evaluation of those requests
under sec. 6673(a)(2) or the bad faith exception arguably would
be outside the scope of the Court of Appeals’ mandate. Cf.
Pollei v. Commissioner, 94 T.C. 595 (1990).
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