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Discussion
Section 7430(a) provides that a taxpayer may recover
litigation costs incurred in a court proceeding brought against
the United States in connection with the determination of a tax
or penalty. Litigation costs may be awarded pursuant to section
7430 if the taxpayer is (1) the prevailing party, (2) exhausted
available administrative remedies, (3) did not unreasonably
protract the court proceedings, and (4) claimed reasonable
administrative and litigation costs. Sec. 7430(a), (b)(1), (3),
(c). The requirements of section 7430 are conjunctive, and
failure to satisfy any one of the requirements precludes an award
of costs. Minahan v. Commissioner, 88 T.C. 492, 497 (1987).
To be the prevailing party (1) the taxpayer must
substantially prevail with respect to either the amount in
controversy or the most significant issue, or set of issues,
presented, and (2) at the time the petition in the case was
filed, the taxpayer must meet the net worth requirements of 28
U.S.C. sec. 2412(d)(2)(B). Sec. 7430(c)(4)(A). The taxpayer
will not be treated as the prevailing party, however, if the
Commissioner establishes that the Commissioner’s position was
substantially justified. Sec. 7430(c)(4)(B); see also Pierce v.
Underwood, 487 U.S. 552, 565 (1988).
Respondent concedes that petitioner exhausted all
administrative remedies and did not unreasonably protract the
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