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Respondent contends that Petitioner failed to satisfy
the qualified offer requirement. Amazingly, if
Petitioner goes down that path of qualified offer,
according to IRS Bulletin: 2004-5, Feb 2, 2004 T.D.
9106, Awards of Attorney Feeds and other costs based
upon qualified offers. If a qualified offer had been
made and accepted attorney fees would not be awarded.
As such, why would anyone ever want to submit a
qualified offer, when the position of Respondent is not
to pay legal fees upon such a request, even though Case
law provides for such an award. [Reproduced
literally.]
Substantially the same statement appears in petitioner’s
answering legal memorandum.
The qualified offer provision allows a taxpayer that is not
a “prevailing party under any other provision of this paragraph”
(sec. 7430(c)(4)(E)(iv)) to nevertheless be treated as a
prevailing party to some extent, if the taxpayer has made a
qualified offer, the case was not settled, and the taxpayer’s
liability ends up as less than or equal to the liability under
the qualified offer. Accordingly, the qualified offer provision
does not remove benefits that a taxpayer would otherwise be
entitled to; the provision, rather, adds a possibility of a
benefit where the taxpayer would otherwise not be entitled to any
award. Also, the provision appears to be designed to encourage
the Commissioner to take seriously any taxpayer settlement offer.
See discussion in Haas & Associates Accountancy Corp. v.
Commissioner, 117 T.C. 48, 59 (2001), affd. 55 Fed. Appx. 476
(9th Cir. 2003).
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