§6239

3342, 3743, we find them to be inapposite.

ternal Revenue Code in effect for the years in issue. References to sec. 7430 are to that section as amended by sec. 1551 of the Tax Reform Act of 1986, Pub. L. 99-514, 100 Stat. 2752 (effective for proceedings commenced after Dec. 31, 1985), and by sec. 6239(a) of the Technical and Miscellaneous Revenue Act of 1988, Pub. L. 100-647, 102 Stat. 3743 (effective with respect to proceedings commenced after Nov. 10, 1988). Sec. 7430 was further amended by the Taxpayer Bill of Rights 2, Pub. L. 104-16

ermit parties to seek administrative costs. In 1988 Congress amended section 7430 to permit prevailing parties in administrative proceedings to seek awards ofadministrative costs. Technical and Miscellaneous Revenue Act of 1988, Pub. L. No. 100-647, sec. 6239(a), 102 Stat. at 3743. Section 7430(f) was added as well, providing the mechanism for the prevailing party seeking the award ofadministrative costs, who was not already before the Court, to petition the Court after the application for admin

Fiscal Responsibility Act of 1982, Pub. L. 97-248, sec. 292(a), 96 Stat. 572. Sec. 7430 was expanded in 1988 to allow for the recovery of reasonable administrative costs. The Technical and Miscellaneous Revenue Act of 1988 (TAMRA), Pub. L. 100-647, sec. 6239(a), 102 Stat. 3743-3746. - 8 - I. Section 7430 Recovery of administrative costs is governed by section 7430(a), which permits a taxpayer who is a “prevailing party” in any administrative proceedings brought by or against the United States t

ich commenced after Dec. 31, 1985. A “proceeding” under sec. 7430 commences when the petition is filed. See Maggie Management Co. v. Commissioner, 108 T.C. 430, 438 (1997). The petition was filed on Sept. 6, 1988. The amendments to sec. 7430 made by sec. 6239(a) of the Technical and Miscellaneous Revenue Act of 1988, Pub. L. 100-647, 102 Stat. 3342, 3743, do not apply here because they are first effective for proceedings commencing after Nov. 10, 1988. 3 Rule references are to the Tax Court Rule

Congress, however, broadened the scope of section 7430 by amending section 6239 of subtitle J (the "Omnibus Taxpayer Bill of Rights") of the Technical and Miscellaneous Revenue Act of 1988 (TAMRA), Pub.

Congress, however, broadened the scope of section 7430 by amending section 6239 of subtitle J (the Omnibus Taxpayer Bill of Rights) of the Technical and Miscellaneous Revenue Act of 1988 (TAMRA), Pub.

e, collect, or refund any tax, interest, or penalty. - 6 - Section 7430 was applicable to proceedings commenced after February 28, 1983. See TEFRA sec. 292(e)(1), 96 Stat. 574.3 The Technical and Miscellaneous Revenue Act of 1988, Pub. L. 100-647, sec. 6239, 102 Stat. 3342, 3743, amendments to section 7430 expanded the relief provided under section 7430 to allow certain prevailing parties to recover reasonable administrative costs in addition to litigation costs. Section 7430(a) sets forth the g

31, 1985), and by section 6239(a) of the Technical and Miscellaneous Revenue Act of 1988, Pub.

respondent filed a notice of no objection. The underlying matter herein was resolved on September 8, 1997, when the Court granted petitioner's motion for summary judgment and decided that there 1(...continued) commenced after Dec. 31, 1985), and by sec. 6239(a) of the Technical and Miscellaneous Revenue Act of 1988, Pub. L. 100-647, 102 Stat. 3342, 3743-3746 (effective with respect to proceedings commenced after Nov. 10, 1988). Sec. 7430 was amended most recently by the Taxpayer Bill of Rights

31, 1985) and by section 6239(a) of the Technical and Miscellaneous Revenue Act of 1988, Pub.

1996. Respondent's response to the motion was 1 References to sec. 7430 are to that section as amended by sec. 1551 of the Tax Reform Act of 1986, Pub. L. 99-514, 100 Stat. 2085, 2752 (effective for proceedings commenced after Dec. 31, 1985) and by sec. 6239(a) of the Technical and Miscellaneous Revenue Act of 1988, Pub. L. 100-647, 102 Stat. 3342, 3743 (effective with respect to proceedings commenced after Nov. 10, 1988). - 3 - filed on February 18, 1997. A hearing on petitioners’ motion was c

ffice Auditor Linda Barrow was assigned to examine petitioners' 1986 Federal income tax return. On October 20, 1988, Office Auditor Barrow sent 2(...continued) filed on Jan. 26, 1995, and, therefore, has been considered under sec. 7430 as amended by sec. 6239(a) of the Technical and Miscellaneous Revenue Act of 1988, Pub. L. 100-647, 102 Stat. 3342, 3743-3744, effective for all civil tax proceedings commenced after Nov. 10, 1988. All Rule references are to the Tax Court Rules of Practice and Pro

ther party requested a hearing on the motion. 1 References to sec. 7430 are to that section as amended by sec. 1551 of the Tax Reform Act of 1986, Pub. L. 99-514, 100 Stat. 2085, 2752 (effective for proceedings commenced after Dec. 31, 1985), and by sec. 6239(a) of the Technical and Miscellaneous Revenue Act of 1988, Pub. L. 100-647, 102 Stat. 3342, 3743-3746 (continued...) - 2 - Accordingly, we rule on petitioners' motion based on the parties' submissions and the existing record. Rule 232(a)(1)

etitioners have satisfied the other 1 References to sec. 7430 in this opinion are to that section as amended by sec. 1551 of the Tax Reform Act of 1986, Pub. L. 99-514, 100 Stat. 2752 (effective for proceedings commenced after Dec. 31, 1985), and by sec. 6239(a) of the Technical and Miscellaneous Revenue Act of 1988, Pub. L. 100-647, 102 Stat. 3342, 3743-3746 (effective with respect to proceedings commenced after Nov. 10, 1988). Sec. 7430 was amended by the Taxpayer Bill of Rights 2 (TBR2), Pub.

de in effect for the year in issue. References to section 7430 in this opinion are to that section as amended by sec. 1551 of the Tax Reform Act of 1986, Pub. L. 99-514, 100 Stat. 2752 (effective for proceedings commenced after Dec. 31, 1985) and by sec. 6239(a) of the Technical and Miscellaneous Revenue Act of 1988, Pub. L. 100- 647, 102 Stat. 3342, 3743-3747 (effective with respect to proceedings commenced after Nov. 10, 1988). Section 7430 was amended most recently by the Taxpayer Bill of Rig

York State Department of Taxation and Finance. 1Hereinafter, all references to petitioner are to petitioner Vivian Burke. 2The petition in this case was filed on Aug. 30, 1993; therefore, the motion has been considered under sec. 7430 as amended by sec. 6239(a) of the Technical and Miscellaneous Revenue Act of 1988, Pub. L. 100-647, 102 Stat. 3342, 3743-3744, effective for all civil tax proceedings commenced after Nov. 10, 1988. All Rule references are to the Tax Court Rules of Practice and Proc

rements must be met. The record must 3 References to sec. 7430 in this opinion are to that section as amended by sec. 1551 of the Tax Reform Act of 1986, Pub. L. 99-514, 100 Stat. 2752 (effective for proceedings commenced after Dec. 31, 1985) and by sec. 6239(a) of the Technical and Miscellaneous Revenue Act of 1988, Pub. L. 100-647, 102 Stat. 3342, 3743-3746 (effective with respect to proceedings commenced after Nov. 10, 1988). Section 7430 was amended most recently by the Taxpayer Bill of Righ

the Court on June 20, 1997. In the settlement, respondent conceded all deficiencies and 1(...continued) by sec. 1551 of the Tax Reform Act of 1986, Pub. L. 99-514, 100 Stat. 2752 (applicable to all proceedings commenced after Dec. 31, 1985), and by sec. 6239(a) of the Technical and Miscellaneous Revenue Act of 1988, Pub. L. 100-647, 102 Stat. 3342, 3743-3747 (effective for all proceedings commenced after Nov. 10, 1988). Sec. 7430 was again amended by the Taxpayer Bill of Rights 2 (TBOR2), Pub.

nd related expenses between the dates that the 1 References to sec. 7430 are to that section as amended by sec. 1551 of the Tax Reform Act of 1986, Pub. L. 99-514, 100 Stat. 2085, 2752 (effective for proceedings commenced after Dec. 31, 1985) and by sec. 6239(a) of the Technical and Miscellaneous Revenue Act of 1988, Pub. L. 100-647, 102 Stat. 3342, 3743-3746 (effective with respect to proceedings commenced after Nov. 10, 1988). Because the petition in this case was filed on June 20, 1994, the p

ion costs pursuant to section 74301 1 References to sec. 7430 in this opinion are to that section as amended by sec. 1551 of the Tax Reform Act of 1986, Pub. L. 99-514, 100 Stat. 2752 (effective for proceedings commenced after Dec. 31, 1985), and by sec. 6239(a) of the Technical and Miscellaneous Revenue Act of 1988, Pub. L. 100-647, 102 Stat. 3342, 3743-3747 (effective with respect to proceedings commenced after Nov. 10, 1988). Sec. 7430 was amended most (continued...) -2- and Rule 231, filed J

2752, and by section 6239(a) of the 1(...continued) Memo.

e Tax Equity and Fiscal Responsibility Act of 1982, Pub. L. 97-248, sec. 292(a), 96 Stat. 324, 572, and, as relevant hereto, the Congress amended section 7430 as part of the Technical and Miscellaneous Revenue Act of 1988, Pub. L. -- 99 -- 100-647, sec. 6239(a), 102 Stat. 3342, 3743-3747, effective with respect to proceedings commenced after November 10, 1988. Section 7430 was amended most recently by the Taxpayer Bill of Rights 2, Pub. L. 104-168, secs. 701-704, 110 Stat. 1452, 1463-1464 (1996)

. Cox was entitled to deduct one-half of the payments, and, in turn, one- half of the payments was reportable as rental income on the joint return. 3 Section 7430, as amended by the Technical and Miscellaneous Revenue Act of 1988, Pub. L. 100-647, sec. 6239, 102 Stat. 3342, 3743-3746 (applicable to proceedings commenced after November 10, 1988), provides that in any court proceeding brought by or against the United States, the "prevailing party" may be awarded reasonable litigation costs. To be

ofessional Conduct of the American Bar Association. 1Unless otherwise indicated, section references are to the Internal Revenue Code as amended and in effect for the relevant period. References to sec. 7430 are to the version in effect as amended by sec. 6239(d) of the Technical and Miscellaneous Revenue Act of 1988, Pub. L. 100-647, 102 Stat. 3743. Unless otherwise indicated, all Rule references are to the Tax Court Rules of Practice and Procedure. - 3 - FINDINGS OF FACT Some of the facts have

To obtain an award of litigation costs taxpayers must prove that they are the "prevailing party" within the meaning of section 7430(c)(4), which requires, inter alia, that they establish that the Commissioner's position in the proceeding was not substantially justified.

ofessional Conduct of the American Bar Association. 1Unless otherwise indicated, section references are to the Internal Revenue Code as amended and in effect for the relevant period. References to sec. 7430 are to the version in effect as amended by sec. 6239(d) of the Technical and Miscellaneous Revenue Act of 1988, Pub. L. 100-647, 102 Stat. 3743. Unless otherwise indicated, all Rule references are to the Tax Court Rules of Practice and Procedure. - 3 - FINDINGS OF FACT Some of the facts have

nacted section 7430 in the Tax Equity and Fiscal Responsibility Act of 1982, Pub. L. 97-248, sec. 292(a), 96 Stat. 572, and, as relevant to the present case, amended it by the Technical and Miscellaneous Revenue Act of 1988 (TAMRA), Pub. L. 100-647, sec. 6239(a), 102 Stat. 3342, 3743-3747, applicable to proceedings commenced after November 10, 1988.9 Because both the administrative proceeding and the court proceeding in this case were commenced after November 10, 1988, and before July 31, 1996,

ee. Discussion A prevailing party may be awarded a judgment for reasonable litigation costs incurred in connection with a Court proceeding pursuant to section 7430, as amended by the Technical and Miscellaneous Revenue Act of 1988, Pub. L. 100-647, sec. 6239, 102 Stat. 3342, 3743-3746 (applicable to petitions filed after November 10, 1988). See also Rule 231. The petition in this case was filed on June 14, 1994. An individual taxpayer must meet seven requirements in order to be awarded reasonabl

on for administrative costs. OPINION 1. Positions of the Parties Petitioner contends that he is entitled to an award of reasonable administrative costs under section 7430. The Technical and Miscellaneous Revenue Act of 1988 (TAMRA), Pub. L. 100-647, sec. 6239(a), 102 Stat. 3342, 3743-3746, amended section 7430 to allow the recovery of costs incurred in administrative proceedings. See also H. Conf. Rept. 100-1104, at 224-226 (1988), 1988-3 C.B. 473, 714-716. Section 7430 provides in pertinent par