In Uncategorized on 02/14/2019 at 14:54

A Section 7430 Legal & Admins Checklist

This blog is directed at the work-a-day, in-the-trenches practitioner. I keep each post as short as possible, but not shorter. Each post should either instruct or amuse, preferably both, but instruction is foremost.

Here’s Judge Gale doing a document correction (a task which befalls Tax Court Judges more than any other judges), and giving a how-to to Yasuko Ogawa, Docket No. 3020-14, filed 2/14/19, and trusty attorney, while incidentally giving a Valentine’s Day present to all of us.

Yas stiped to a decision last year, but left off the Section 7430 legals & admins, so she and trusty attorney move a month later for same. A wee bit late, says Judge Gale, but no worry.

“Claims for litigation and administrative costs are governed by section 7430 and Rules 230 through 233. Under Rule 232(f), ‘[t]he Court’s disposition of a motion for reasonable litigation or administrative costs shall be included in the decision entered in the case.’ See also Note accompanying amendment to Rule 232(f), 93 T.C. 1021 (noting that the requirement ‘is designed to simplify appeal procedures by incorporating into a single document the Court’s disposition of both the substantive issues in the case and the motion for reasonable litigation or administrative costs’). In sum, the Court’s Rules governing awards of litigation costs contemplate only a single decision being entered in a case.” Order, at p. 2.

Now Yas and trusty attorney should have moved for a vacation of the stiped decision, and thrown in their legals & admins evidence. They didn’t, so Judge Gale, emulating that Obliging Jurist Judge David Gustafson, treats their motion as a motion to vacate and grants it.

He also treats the stiped decision as a stip of settled issues, at no extra charge, curing Yas’ Rule 231(c) miscue.

And he also gives Yas and trusty attorney a checklist of the evidence they need to make a prima facie case for legals & admins.

“…we find that the Declaration of [trusty attorney] fails to satisfy Rule 231(d), which provides:

‘A motion for an award of reasonable litigation or administrative costs shall be accompanied by a detailed affidavit or declaration by the moving party or counsel for the moving party which sets forth distinctly the nature and amount of each item of costs for which an award is claimed.’

“The Declaration provides: “The total time spent by counsel relative to representation of both Husband and Wife Petitioners [cases were consolidated. ed] is 231.15 hours to and through trial preparation twice, to research treaties, and taxation of foreign sourced income and ultimately settlement.’ The Declaration also provides that out-of-pocket costs of $1,661.94 were expended for ‘Online computer research’. However, the Declaration does not describe the specific nature of the work [trusty attorney] performed, the number of hours he worked on each matter for each petitioner, or the date such work was performed. We therefore find it lacks the specificity required by Rule 231(d) and will direct petitioner to file a supplemental declaration addressing the aforementioned deficiencies.” Order, at p. 3. (Citation and footnote omitted, but the footnote is important.)

Here’s the footnote: “Additionally, we note that ‘[i]n determining the amount of an attorney fee award, courts customarily require the applicant to produce contemporaneous billing records or other sufficient documentation so that the district court can fulfill its duty to examine the application for noncompensable hours.” Order, at p. 3, footnote 3.

Oh, and notwithstanding Rule 232(b), IRS gets a chance to respond.


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