- 5 - Discussion Section 7430 provides for the award of litigation costs incurred in connection with a court proceeding brought against the United States involving the determination of any tax, interest, or penalty pursuant to the Internal Revenue Code. An award of litigation costs may be made where the taxpayer (1) is the “prevailing party”, (2) exhausted available administrative remedies, (3) did not unreasonably protract the judicial proceeding, and (4) claimed reasonable litigation costs. Sec. 7430(a), (b)(1), (3), and (c). These requirements are conjunctive, and petitioner has the burden of establishing that all of these requirements have been satisfied. See Rule 232(e); Minahan v. Commissioner, 88 T.C. 492, 496-497 (1987). For the reasons stated below, we find it unnecessary to address whether the position of the respondent was substantially justified in this matter, whether petitioner unreasonably protracted the proceedings, or whether the costs claimed are reasonable. Petitioner Must Pay or Incur Fees and Costs A party’s award for litigation costs is limited to the costs that the party actually paid or incurred. Sec. 7430(a)(2), (c)(1)(B)(iii); Foothill Ranch Co. Pship. v. Commissioner, 110 T.C. 94, 101 (1998)(holding that a partner may receive an award for litigation costs only to the extent such fees paid by thePage: Previous 1 2 3 4 5 6 Next
Last modified: May 25, 2011