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David did not file a return relating to 1983 through 1985.
He delinquently filed his 1986 through 1989 and 1991 returns in
1993. Petitioners delinquently filed their 1992 joint return.
By notice of deficiency (notice) dated June 25, 1996, respondent
determined deficiencies, additions to tax, and penalties relating
to 1983 through 1989 and 1991. On that same day, respondent sent
petitioners a second notice in which he determined a deficiency
and section 6662 penalty relating to 1992.
On September 30, 2002, the trial was held in Tampa, Florida,
and on November 24, 2003, the Court issued its memorandum
opinion. The Court filed petitioners’ motions for reasonable
litigation and administrative costs on July 8, 2005, and January
25, 2007. The Court, on March 21, 2007, filed respondent’s
objections.
Discussion
Pursuant to section 7430, we may award the prevailing party
in a Tax Court proceeding reasonable litigation and
administrative costs. To be a prevailing party, petitioners must
establish that they have substantially prevailed with respect to
either the amount in controversy or the most significant issues
presented. Sec. 7430(c)(4)(A); Rule 232(e). Petitioners,
however, will not be treated as the prevailing party if
respondent’s position was substantially justified (i.e., had a
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Last modified: November 10, 2007