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1. Inapplicability of Section 6673
In our September 8 order, we indicated that we would
evaluate petitioners’ fee requests under section 7430 rather than
the proffered ground of section 6673. We premised that decision
on the distinction the Supreme Court has drawn between (1) “fee-
shifting” provisions (such as section 7430) that embody a
substantive policy (e.g., encouraging private parties to enforce
their rights by allowing them to recover their attorney’s fees if
successful) and (2) what may be termed “fee sanction” rules (such
as section 6673), the applicability of which “depends not on
which party wins the lawsuit, but on how the parties conduct
themselves during the litigation.” Chambers v. NASCO, Inc., 501
U.S. 32, 53 (1991); see also Bus. Guides, Inc. v. Chromatic
Commcns. Enters., Inc., 498 U.S. 533, 553 (1991); Cooter & Gell
v. Hartmarx Corp., 496 U.S. 384, 409 (1990). We noted that,
whereas a fee award under a fee-shifting provision generally
encompasses all aspects of the litigation, see Commissioner, INS
v. Jean, 496 U.S. 154, 161-162 (1990), fees awarded as a sanction
are properly limited to those directly caused by the sanctionable
conduct, see Cooter & Gell v. Hartmarx Corp., supra at 406-407.
In Dixon VII, we discussed the practical consequences of that
distinction in the context of this fee litigation:16
16 The PH appellants had filed a motion in this Court in
November 2005 requesting appellate fees under sec. 6673, “to
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