- 36 -
On April 30, 2003, petitioners filed a reply. Pursuant to
petitioners’ request, an evidentiary hearing was conducted on
petitioners’ motion in Dallas, Texas.
OPINION
Administrative costs incurred in connection with an
administrative proceeding may be awarded under section 7430(a)
only if a taxpayer: (1) Is the prevailing party, and (2) did
not unreasonably protract the administrative proceeding. Sec.
7430(a) and (b)(3).14 Similarly, litigation costs incurred in
connection with a court proceeding may be awarded only if a
taxpayer: (1) Is the prevailing party; (2) has exhausted his or
her administrative remedies within the IRS; and (3) did not
unreasonably protract the court proceeding. Sec. 7430(a) and
(b)(1), (3).
A taxpayer must satisfy each requirement in order to be
entitled to an award of administrative or litigation costs under
section 7430. Sec. 7430(a)(1) and (2), (c)(1) and (2); Rule
232(e).
To be a “prevailing party”, the taxpayer must: (1)
Substantially prevail with respect to either the amount in
14 Administrative costs include only the costs incurred on
or after the earlier of: (1) The date of receipt by the taxpayer
of the decision by the Appeals Office; (2) the date of the notice
of deficiency; or (3) the date on which the first letter of
proposed deficiency which allows the taxpayer an opportunity for
administrative review in the IRS Appeals Office is sent. Sec.
7430(c)(2).
Page: Previous 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 Next
Last modified: November 10, 2007