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Appeals Office a notice of decision, (2) the date of respondent’s
notice of deficiency, or (3) the date respondent mails a first
letter of proposed deficiency giving the taxpayer a right to
protest to respondent’s Appeals Office (commonly referred to as a
30-day letter). The flush language of section 7430(c)(2)
provides as follows:
Such term [administrative costs] shall only include
costs incurred on or after whichever of the following
is the earliest: (i) the date of the receipt by the
taxpayer of the notice of the decision of * * *
[respondent’s Appeals Office]; (ii) the date of the
notice of deficiency; or (iii) the date on which the
1st letter of proposed deficiency which allows the
taxpayer an opportunity for administrative review in
* * * [respondent’s Appeals Office] is sent.
Because respondent’s first letter of proposed deficiency
(i.e., a so-called 30-day letter) typically is mailed to a
taxpayer by respondent’s Examination Division prior to any
contact between the taxpayer and respondent’s Appeals Office,
Congress clearly contemplated that under section 7430(c)(2)
taxpayers would be able to recover administrative costs
independently of any actual subsequent court litigation and
independently of any claim for recovery of litigation costs.
Also applicable, however, to a claim for reimbursement of
administrative costs under section 7430, is the requirement that
a taxpayer must qualify as a “prevailing party”. Sec. 7430(a).
For a taxpayer to qualify as a prevailing party, respondent’s
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Last modified: November 10, 2007