Jerry and Patricia A. Dixon, et al. - Page 33

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          it imposed a requirement that taxpayers show prejudice as a                 
          result of the misconduct.”  Id.  Taking our cue from Henry v.               
          Commissioner, supra, we conclude that, given the foregoing                  
          language of the Court of Appeals in Dixon V, respondent’s                   
          position in Dixon III was not substantially justified.  Cf.                 
          Golembiewski v. Barnhart, 382 F.3d 721, 724 (7th Cir. 2004)                 
          (“Strong language against the government’s position in an opinion           
          [of a reversing appellate court] discussing the merits of a key             
          issue is evidence in support of an award of EAJA fees.”).                   
               D.   Conclusion                                                        
               We conclude that petitioners are entitled to relief under              
          section 7430.                                                               
          III. Amount of Award                                                        
               A.   Respondent’s Position                                             
               Respondent argues that, even if petitioners are entitled to            
          relief under section 7430, we should determine the amounts of               
          their awards by giving effect to section 7430’s hourly rate cap             
          and by denying compensation for services respondent alleges are             
          “redundant, excessive and unnecessary.”29                                   
               B.   Applicability of Statutory Rate Cap                               
               The rate cap to which fee awards under section 7430 are                
          generally subject applies “unless the court determines that * * *           
          a special factor, such as the limited availability of qualified             

          29 Respondent does not quantify that argument in terms of                   
          noncompensable hours.                                                       

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