- 51 -
regulation as to exhaustion of administrative remedies. See
Corson v Commissioner, 123 T.C. at 211-212; Swanson v.
Commissioner, 106 T.C. at 97-100.23
2. Paid or Incurred
Awards of costs and fees under section 7430(a) are limited
to reasonable litigation costs “incurred”. The attorney fee
component is specifically limited to “fees paid or incurred”.
Sec. 7430(c)(1)(B)(iii).24 Petitioner does not contend that
section 7430(c)(3)(B)’s exception for pro bono services applies
to the instant case.
Respondent contends that “petitioner has not established
that he has actually paid his attorney or is otherwise liable to
his attorney for payment of the litigation costs claimed.”
Petitioner responds by citing provisions of the Equal Access to
Justice Act, and asserts that “Here, the actual time and rate at
which time and expenses were owed was provided. As such the
request for legal fees is valid.” Petitioner does not assert
that he paid to Moffatt any of the costs claimed in the motion
23 Swanson v. Commissioner, 106 T.C. 76, 98 (1996),
interprets sec. 301.7430-1(e), Proced. & Admin. Regs. That
paragraph (e) was redesignated “paragraph (f)” by T.D. 9050, par.
3, 2003-1 C.B. 693, 696. Accordingly, the Swanson analysis
applies now to paragraph (f) of that regulation.
24 Not all fee-shifting statutes are so limited. See
discussion in Frisch v. Commissioner, 87 T.C. 838, 843-844
(1986); see also Corrigan v. United States, 27 F.3d 436, 438 (9th
Cir. 1994).
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