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section 7430 (sec. 301.7430-3(c), Proced. & Admin. Regs.) and
under the interpretation placed thereon by the referenced court
cases, taxpayers (such as petitioners herein) who do a good job
at the administrative level of resolving issues and getting
respondent to realize the error of his ways are precluded from
recovering administrative costs incurred in achieving those
favorable results. To the contrary, taxpayers who do not do as
good a job at the administrative level and who receive adverse
Appeals Office notices of decision or notices of deficiency, but
who later convince respondent to concede issues or who
substantially prevail in litigation on the issues, are able to
seek a recovery of administrative costs. In effect, taxpayers
who do a better job at the administrative level of resolving
issues raised by respondent on audit are prejudiced in their
ability to recover administrative costs under section 7430.
Although we sympathize with petitioners’ situation, the
statute, as enacted, is controlling, and our authority is
limited. As we stated in Metzger Trust v. Commissioner,
76 T.C. 42, 59 (1981), affd. 693 F.2d 459 (5th Cir. 1982):
Courts do not have the power to repeal or amend the
enactments of the legislature even though they may
disagree with the result * * *
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Last modified: November 10, 2007