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“position” must not have been substantially justified. Sec.
7430(c)(4)(A) and (B).
Under section 7430(c)(7)(B), respondent’s position that is
to be evaluated as to the justification therefor is identified as
the position respondent takes in the administrative proceeding as
of the earlier of either the date of receipt by the taxpayer of
respondent’s Appeals Office’s notice of decision or the date of
mailing to the taxpayer of respondent’s notice of deficiency
(i.e., no mention is made in section 7430(c)(7)(B) of the date of
respondent’s 30-day letter).
Because of the more restrictive language of section
7430(c)(7)(B), we have held that a taxpayer cannot be treated as
a prevailing party under section 7430 where respondent is treated
as never having adopted a “position” in an Appeals Office notice
of decision or in respondent’s notice of deficiency. See Rathbun
v. Commissioner, 125 T.C. 7, 14 (2005); Fla. Country Clubs, Inc.
v. Commissioner, 122 T.C. 73, 87 (2004), affd. 404 F.3d 1291
(11th Cir. 2005).
Because respondent herein issued to petitioners neither an
Appeals Office notice of decision nor a notice of deficiency, we
cannot consider respondent to have adopted any position for
purposes of section 7430. Petitioners therefore cannot be
treated as a prevailing party, and petitioners may not recover
their $7,253 in administrative costs.
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Last modified: November 10, 2007