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attorneys for such proceeding, the difficulty of the issues
presented in the case, or the local availability of tax
expertise, justifies a higher rate.” Sec. 7430(c)(1)(B)(iii).
Not surprisingly, petitioners urge us to lift the rate cap, while
respondent argues that we have no legal basis for doing so.30 We
begin by examining the three examples of special factors in the
statute and then discuss other factors that courts have taken
into account in this context.
1. Limited Availability of Qualified Attorneys
The Supreme Court has narrowly interpreted the “limited
availability of qualified attorneys” factor in the context of the
EAJA. See Pierce v. Underwood, 487 U.S. 552, 571-572 (1988),
interpreting 28 U.S.C. sec. 2412(d)(2)(A)(ii).31 Specifically,
the Court concluded that such language
must refer to attorneys “qualified for the proceedings”
in some specialized sense, rather than just in their
general legal competence. We think it refers to
attorneys having some distinctive knowledge or
30 The Hongsermeiers also argue that respondent’s
calculation of the applicable rate caps, see supra Part I.A., is
erroneous. They maintain that a 27.6-point increase in the
relevant CPI figures (i.e., from 151.075 to 178.675) requires a
27.6-percent increase in the statutory rate cap. That argument
is based on a misapprehension of the statutory adjustment
formula; it is the relative difference between CPI figures (i.e.,
27.6/151.075 = 18.27 percent)--not the arithmetic difference--
that determines the adjustment. See sec. 1(f)(3) (cross-
referenced in flush language of sec. 7430(c)(1)).
31 “The reasoning employed by the courts under the
attorney’s fees provision of the Equal Access to Justice Act
applies equally to review under section 7430.” Huffman v.
Commissioner, 978 F.2d at 1143.
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