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tion costs under section 7430(a) in connection with the $8 WSB
interest determination and the section 6662(a) determination to
the extent that determination imposed an accuracy-related penalty
on the portion of the 2002 underpayment that was attributable to
that determination. As discussed above, respondent does not
maintain that respondent’s position with respect to the $8 WSB
interest determination was substantially justified under section
7430(c)(4)(B). However, according to respondent, “this issue did
not require a large expenditure of time or resources. The bulk
of the trial and the expense of the proceeding related to the
capital gains issue raised by petitioners.”
In their pretrial memorandum, during trial, and on brief,
petitioners focused only on petitioners’ alleged capital gain
issue and petitioners’ alleged capital loss issue, and not on,
inter alia, the $8 WSB interest determination. It was only when
the Court asked Mr. Kim during his direct testimony whether
petitioners had any information bearing on the $8 WSB interest
determination that petitioners even addressed that determination.
On the record before us, we find it difficult to believe that
petitioners incurred any litigation costs before, during, or
after trial with respect to the $8 WSB interest determination or
the section 6662(a) determination to the extent that determina-
tion imposed an accuracy-related penalty on the portion of the
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Last modified: November 10, 2007