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D. Other Threshold Requirements
Respondent does not allege that petitioners failed to
exhaust their administrative remedies and does not dispute that
petitioners prevailed in the proceedings at issue.
E. Conclusion
Petitioners are entitled to relief under section 7430.
III. Amounts of Awards
A. Overview
Our determination of the amounts of petitioners’ awards
under section 7430 turns on three inquiries with respect to each
fee request: First, what is a reasonable attorney’s fee (within
the confines of section 7430) for the representation covered by
the fee request? Second, what are the reasonable expenses
associated with that representation? Third, to what extent have
real parties in interest who satisfy section 7430’s net worth
requirement (hereafter, eligible persons) paid or incurred those
amounts?19
B. Reasonable Attorney’s Fee: The Lodestar
1. In General
“The most useful starting point for determining the amount
of a reasonable fee is the number of hours reasonably expended on
the litigation multiplied by a reasonable hourly rate.” Hensley
19 Respondent does not allege that petitioners unreasonably
protracted any portion of the proceedings at issue. See sec.
7430(b)(3).
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