- 29 -
imposed by section 7430(c)(4)(A)(ii).27 We address that issue in
Part III.F., infra.
C. Substantial Justification Defense
1. Identifying “the Position of the
United States in the Proceeding”
Under section 7430(c)(4)(B)(i), it is “the position of the
United States in the proceeding” that is evaluated under the
substantial justification standard. Typically, the position of
the United States in a judicial proceeding for purposes of
section 7430 is set forth in the Commissioner’s answer to the
petition. E.g., Maggie Mgmt. Co. v. Commissioner, 108 T.C. 430,
442 (1997). These proceedings, of course, are anything but
typical. Although these cases originated with petitions and
answers in a tax deficiency setting, the appellate fees at issue
are not directly related to those initial pleadings or the
ensuing litigation on the merits. Rather, the proceedings to
27 In Cobell v. Norton, 407 F. Supp. 2d 140, 148 (D.D.C.
2005), the court concluded that the net worth affidavits of the
named plaintiffs in the underlying class action “amply satisfy
the [net worth] requirements of the [EAJA] statute for the entire
class.” We note that the referenced class includes more than
350,000 claimants. See id. at 145. Olenhouse v. Commodity
Credit Corp., 922 F. Supp. 489 (D. Kan. 1996), the EAJA case
cited by the Norton court for support, is similarly inapposite.
The court in Olenhouse, while recognizing that “[e]ach party
seeking an award must meet the relevant net worth cap”, id. at
492, concluded that the named plaintiffs, “i.e., those who
prosecuted the claim”, id. at 493, were the ones seeking the EAJA
award; accordingly, they alone were required to meet the net
worth requirement. The court noted that the Government “has not
shown that * * * unnamed members of the class were willing and
able to bear the cost of the litigation.” Id. That is not the
case here.
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