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1. Petitioners have been apprised that
RESPONDENT has conceded the case. And a judgment
was issued in favor of Petitioner. As such
Petitioner’s have substantially prevailed on the
issue. This satisfies the litigation element of
Code Section 7430, and the prevailing element.
Under the Congressional Committee Report on P.L.
100-647, the Committee Reports seem to reflect an
intent that one be permitted to recover fees and
costs any time the IRS has issued a 30-day letter.
This however differs from Statute, which states that
the “substantially unjustified position” of the
United States must be asserted as of “the date of
the receipt by the taxpayer of the notice of the
decision of the IRS Appeals Office, or, the date of
the notice of deficiency.” IRS Code 7430(c)(7).
In item 2, of Petitioner’s Motion for Legal Costs,
dated 1-21-06, Petitioner alleged Respondent was
substantial unjustified.
2. “The position advanced by the United States was
substantially unjustified by the facts that 5
children were involved. To deny the two Earned
Income Deductions when this many children were
involved Petitioner believes was both unjustified,
and based on red lining the area in which Petitioner
lives.” [Reproduced literally.]
We agree with respondent that his position in this
litigation was substantially justified.
“Substantially justified” is defined as “justified to a
degree that could satisfy a reasonable person” and having a
“reasonable basis both in law and fact.” Pierce v. Underwood,
487 U.S. 552, 565 (1988) (internal quotation marks omitted);16
16 Although the dispute in Pierce v. Underwood, 487 U.S. 552
(1988), arose under the provisions of the Equal Access to Justice
Act (EAJA), 28 U.S.C. sec. 2412(d), the relevant provisions of
this part of the EAJA are almost identical to the language of
this part of sec. 7430. Cozean v. Commissioner, 109 T.C. 227,
(continued...)
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