Lewes CPA
officeProgar & Company, P.A.
Certified Public Accounting services for businesses and individuals
Award of costs and attorneys' fees (MS Word)
Award of costs and attorneys' fees (.pdf)
Award of costs and attorneys' fees
Dear Reader:
I am writing to inform you of the rules under which taxpayers who do
battle with the Internal Revenue Service may be able to recover some
or all of the administrative and litigation costs they have
incurred.
Administrative costs may be awarded from the date on which IRS sent
a notice of deficiency, if the taxpayer substantially prevails with
respect to the most significant issues or the amount in controversy,
and has not unreasonably protracted the proceeding. (However, a
taxpayer won't be treated as a prevailing party if IRS can show that
its position was substantially justified.) A specific application
procedure must be followed if costs are to be awarded by IRS to the
taxpayer. If a taxpayer has exhausted his administrative remedies
within IRS and takes the case to court, he can also recover
reasonable litigation costs.
Costs that can be recovered include reasonable attorney fees, court
costs, expenses of expert witnesses, and costs to prepare any study
or analysis necessary to the case. The hourly cap on awardable
attorney fees is $180 per hour in calendar years 2010 and 2009,
unless special factors justify a higher rate.
If you would like more details about the award of administrative and
litigation costs and fees, please do not hesitate to call.