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Finally, we note that Publication 5 and the applicable IRM
section were drafted more than 10 years after section
601.105(d)(2)(iv), Statement of Procedural Rules, was last
amended in 1987.3 While procedural rules and publications are
not laws, they act as guides for the IRS and taxpayers to follow.
We therefore hold that petitioner satisfied the statutorily
imposed requirement to have exhausted all administrative remedies
available by filing a written request for an Appeals Office
conference.
B. Whether Respondent’s Litigating Position Was Substantially
Justified
In the context of a motion for reasonable litigation costs,
a “court proceeding” is any civil action brought in a court of
the United States. Sec. 7430(c)(6). The litigating position of
the United States is the position it takes in the court
proceeding to which section 7430(a) applies. Sec. 7430(c)(7);
Maggie Mgmt. Co. v. Commissioner, 108 T.C. 430, 442 (1997).
Respondent’s litigating position is found in his answer, which
was filed on June 30, 2003. Huffman v. Commissioner, 978 F.2d
1139, 1148 (9th Cir. 1992), affg. in part, revg. in part and
remanding T.C. Memo. 1991-144; Maggie Mgmt. Co. v. Commissioner,
supra at 442. Respondent’s position in the answer was that: (1)
3 In 1993, the IRS proposed amendments to the Statement of
Procedural Rules, permitting a small case request dollar
limitation of “not more than $25,000”. Sec. 601.106(b)(4),
Proposed Statement of Procedural Regs., 58 Fed. Reg. 48805 (Sept.
20, 1993). This proposal has yet to be adopted.
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