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the taxpayer satisfies the qualified offer provisions of
subsections (c)(4)(E) and (g) of section 7430.
In his motion for an award of reasonable litigation costs
petitioner contended as follows:
4. Petitioner’s filing of their Petition stating that
an EIC was available satisfies the Qualified Offer
Requirements if any needed to obtain Litigation Costs.
The Petition itself satisfies notice to the Director of
the IRS that the Petition was requesting Litigation
costs. The fact that the Appeals office made an
internal ruling that Petitioner’s deserved the EIC
credit, and yet RESPONDENT’s counsel failed to follow
that position satisfies the point that Petitioners
availed themselves of the Appeal process satisfies the
Appeal element with respect to requesting Legal fees
and Costs. [Reproduced literally.]
In a telephone conference, petitioner’s counsel informally
indicated that his contentions as to the qualified offer
provisions were in error and that claim was no longer part of the
dispute in the instant case.21
In his opening legal memorandum, petitioner revisits the
issue, stating as follows:
21 Compare, e.g., Johnston v. Commissioner, 122 T.C. 124,
126 (2004), affd. 461 F.3d 1162 (9th Cir. 2006), with Downing v.
Commissioner T.C. Memo. 2005-73, Item E, regarding the
requirement of sec. 7430(g)(1)(C) that the document he
“designated at the time it is made as a qualified offer for
purposes of this section”. The petition did not include such a
designation. Also, Rule 34(b)(8) provides that a claim for
litigation costs “shall not be included in the petition in a
deficiency or liability action”, so that the petition filing
could not constitute a qualified offer. Finally, sec.
7430(c)(4)(E)(ii)(I) provides that the qualified offer
alternative is not available to “any judgment issued pursuant to
a settlement”; the instant case has been settled.
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