United States Tax Court
Rules
TITLE XXIII
CLAIM FOR LITIGATION AND ADMINISTRATIVE COSTS
Rule 230. General
(a) Applicability. The Rules of this Title XXIII set forth
the special provisions which apply to claims for reasonable
litigation and administrative costs authorized by Code Section
7430. Except as otherwise provided in this Title, the other Rules
of Practice and Procedure of the Court, to the extent pertinent,
are applicable to such claims for reasonable litigation and
administrative costs. See Title XXVI for Rules relating to
separate actions for administrative costs, authorized by Code
Section 7430(f)(2).
(b) Definitions. As used in the Rules in this Title--
(1) "Reasonable litigation costs" include the items described
in Code Section 7430(c)(1).
(2) A "deficiency action" is an action to redetermine a
deficiency determined by the Commissioner in income, gift, or
estate tax or in the taxes under Code Chapter 41, 42, 43, or 44
(relating to the excise taxes on certain organizations and
persons dealing with them), or in the tax under Code Chapter 45
(relating to the windfall profit tax), or in any other taxes
which are the subject of a notice of deficiency by the
Commissioner.
(3) A "liability action" is an action to redetermine fiduciary
or transferee liability determined by the Commissioner.
(4) A "partnership action" is an action for readjustment of
partnership items under Code Section 6226 or adjustment of
partnership items under Code Section 6228.
(5) A "revocation action" is an action for declaratory
judgment involving the revocation of a determination that an
organization is described in Code Section 501(c)(3).
(6) In the case of a partnership action, the term "party"
includes the partner who filed the petition, the tax matters
partner, and each person who satisfies the requirements of Code
Section 6226(c) and (d) or 6228(a)(4). See Rule 247(a).
(7) "Attorney's fees" include fees paid or incurred for the
services of an individual (whether or not an attorney) who is
authorized to practice before the Court or before the Internal
Revenue Service. For the procedure for admission to practice
before the Court, see Rule 200.
(8) "Reasonable administrative costs" means the items
described in Code Section 7430(c)(2).
(9) "Administrative proceeding" means any procedure or other
action before the Internal Revenue Service.
(10) "Court proceeding" means the deficiency, liability,
partnership, or revocation action brought in this Court and in
which the claim for reasonable litigation costs or reasonable
administrative costs is made.
Rule 231. Claims for Litigation and Administrative
Costs
(a) Time and manner of claim.
(1) Agreed cases. Where the parties have reached a settlement
which disposes of all issues in the case including litigation and
administrative costs, an award of reasonable litigation and
administrative costs, if any, shall be included in the stipulated
decision submitted by the parties for entry by the Court.
(2) Unagreed cases. Where a party has substantially prevailed
and wishes to claim reasonable litigation or administrative
costs, and there is no agreement as to that party's entitlement
to such costs, a claim shall be made by motion filed--
(A) Within 30 days after the service of a written opinion
determining the issues in the case;
(B) Within 30 days after the service of the pages of the
transcript that contain findings of fact or opinion stated orally
pursuant to Rule 152 (or a written summary thereof); or
(C) After the parties have settled all issues in the case
other than litigation and administrative costs. See paragraphs
(b)(3) and (c) of this Rule regarding the filing of a stipulation
of settlement with the motion in such cases.
(b) Content of motion. A motion for an award of reasonable
litigation or administrative costs shall be in writing and shall
contain the following:
(1) A statement that the moving party is a party to a
deficiency or liability action, a partnership action, or a
revocation action, and that any such action was commenced after
February 28, 1983;
(2) If the claim includes a claim for administrative costs, a
statement that the administrative proceeding was commenced after
November 10, 1988;
(3) A statement sufficient to demonstrate that the moving
party has substantially prevailed with respect to either the
amount in controversy or the most significant issue or set of
issues presented in the Court proceeding, including a stipulation
in the form prescribed by paragraph (c) of this Rule as to any
settled issues;
(4) A clear and concise statement of each reason why the
moving party alleges that the position of the Commissioner in the
Court proceeding, and if the claim includes a claim for
administrative costs, in the administrative proceeding, was not
substantially justified, and a statement of the facts on which
the moving party relies to support each of such reasons;
(5) A statement that the moving party meets the net worth
requirements, if applicable, of Section 2412(d)(2)(B) of title
28, United States Code (as in effect on October 22, 1986), which
statement shall be supported by an affidavit executed by the
moving party and not by counsel for the moving party;
(6) A statement that the moving party has exhausted the
administrative remedies available to such party within the
Internal Revenue Service;
(7) A statement that the moving party has not unreasonably
protracted the Court proceeding and, if the claim includes a
claim for administrative costs, the administrative proceeding;
(8) A statement of the specific litigation and administrative
costs for which the moving party claims an award, supported by an
affidavit in the form prescribed in paragraph (d) of this Rule;
(9) If the moving party requests a hearing on the motion, a
statement of the reasons why the motion cannot be disposed of by
the Court without a hearing (see Rule 232(a)(3) regarding the
circumstances in which the Court will direct a hearing); and
(10) An appropriate prayer for relief.
(c) Stipulation as to settled issues. If some or all of the
issues in a case (other than litigation and administrative costs)
have been settled by the parties, then a motion for an award of
reasonable litigation or administrative costs shall be
accompanied by a stipulation, signed by the parties or by their
counsel, setting forth the terms of the settlement as to each
such issue (including the amount of tax involved). A stipulation
of settlement shall be binding upon the parties unless otherwise
permitted by the Court or agreed upon by those parties.
(d) Affidavit in support of costs claimed. A motion for an
award of reasonable litigation or administrative costs shall be
accompanied by a detailed affidavit by the moving party or
counsel for the moving party which sets forth distinctly the
nature and amount of each item of costs paid or incurred for
which an award is claimed.
Rule 232. Disposition of Claims for Litigation and
Administrative Costs
(a) General. A motion for reasonable litigation or
administrative costs may be disposed of in one or more of the
following ways, in the discretion of the Court:
(1) The Court may take such action as it deems appropriate, on
such prior notice, if any, which it may consider reasonable. The
action of the Court may be taken without written response or
hearing.
(2) The Court may take action after directing that a written
response be filed. In that event, the motion shall be served upon
the Commissioner, who shall file such response within 60 days
after service of the motion.
(3) After receiving the Commissioner's response, the Court may
direct a hearing, which will be held at a location that serves
the convenience of the parties and the Court. A motion for
reasonable litigation or administrative costs ordinarily will be
disposed of without a hearing unless it is clear from the motion
and the Commissioner's written response that there is a bona fide
factual dispute that cannot be resolved without an evidentiary
hearing.
(b) Conference required. If the Court directs the Commissioner
to file a written response, then counsel for the Commissioner and
the moving party or counsel for the moving party shall confer
prior to the date for filing such response and attempt to reach
an agreement as to each of the allegations by the moving party.
The Court expects that, at such conference, the moving party or
counsel for the moving party shall make available to counsel for
the Commissioner substantially the same information relating to
any claim for attorney's fees which, in the absence of an
agreement, the moving party would be required to file with the
Court pursuant to paragraph (d) of this Rule.
(c) Response by the Commissioner. If the Court directs the
Commissioner to file a written response, then such response shall
specifically state:
(1) Whether the Commissioner agrees that the moving party has
substantially prevailed;
(2) Whether the Commissioner agrees that the position of the
Commissioner was not substantially justified;
(3) Whether the Commissioner agrees that the moving party
meets the net worth requirements, if applicable, as provided by
law;
(4) Whether the Commissioner agrees that the moving party has
exhausted the administrative remedies available to such party
within the Internal Revenue Service;
(5) Whether the Commissioner agrees that the moving party has
not unreasonbly protracted the Court proceeding and (if the claim
includes a claim for administrative costs) the administrative
proceeding;
(6) Whether the Commissioner agrees that the amounts of costs
claimed are reasonable; and
(7) The basis for the Commissioner's disagreeing with any such
allegations by the moving party.
If the Commissioner agrees with the moving party's request for
a hearing, or if the Commissioner requests a hearing, then such
response shall include a statement of the Commissioner's reasons
why the motion cannot be disposed of without a hearing.
(d) Additional affidavit. Where the Commissioner's response
indicates that the Commissioner and the moving party are unable
to agree as to the amount of attorney's fees which is reasonable,
counsel for the moving party shall, within 30 days after service
of the Commissioner's response, file an additional affidavit
which shall include:
(1) A detailed summary of the time expended by each individual
for whom fees are sought, including a description of the nature
of the services performed during each period of time summarized.
Each such individual is expected to maintain contemporaneous,
complete, and standardized time records which accurately reflect
the work done by such individual. Where the reasonableness of the
hours claimed becomes an issue, counsel is expected to make such
time records available for inspection by the Court or by counsel
for the Commissioner upon request.
(2) The customary fee for the type of work involved. Counsel
shall provide specific evidence of the prevailing community rate
for the type of work involved as well as specific evidence of
counsel's actual billing practice during the time period
involved. Counsel may establish the prevailing community rate by
affidavits of other counsel with similar qualifications reciting
the precise fees they have received from clients in comparable
cases, by evidence of recent fees awarded by the courts or
through settlement to counsel of comparable reputation and
experience performing similar work, or by reliable legal
publications.
(3) A description of the fee arrangement with the client. If
any part of the fee is payable only on condition that the Court
award such fee, the description shall specifically so state.
(4) The preclusion of other employment by counsel, if any, due
to acceptance of the case.
(5) Any time limitations imposed by the client or by the
circumstances.
(6) Any other problems resulting from the acceptance of the
case.
(7) The professional qualifications and experience of each
individual for whom fees are sought.
(8) The nature and length of the professional relationship
with the client.
(9) Awards in similar cases, if any.
(10) Any other information counsel believes will assist the
Court in evaluating counsel's claim, which may include, but shall
not be limited to, information relating to the novelty and
difficulty of the questions presented, the skill required to
perform the legal services properly, and any efforts to settle
the case.
Where there are several counsel of record, all of whom are
members of or associated with the same firm, an affidavit filed
by first counsel of record or that counsel's designee (see Rule
21(b)(2)) shall satisfy the requirements of this paragraph, and
an affidavit by each counsel of record shall not be required.
(e) Burden of proof. The moving party shall have the burden of
proving that the moving party has substantially prevailed, that
the moving party has exhausted the administrative remedies
available to the moving party within the Internal Revenue
Service, that the moving party has not unreasonably protracted
the court proceeding or (if the claim includes a claim for
administrative costs) the administrative proceeding, that the
moving party meets the net worth requirements, if applicable, as
provided by law, that the position of the Commissioner was not
substantially justified, and that the amount of costs claimed is
reasonable.
(f) Disposition. The Court's disposition of a motion for
reasonable litigation or administrative costs shall be included
in the decision entered in the case. Where the Court in its
opinion states that the decision will be entered under Rule 155,
or where the parties have settled all of the issues other than
litigation and administrative costs, the Court will issue an
order granting or denying the motion and determining the amount
of reasonable litigation and administrative costs, if any, to be
awarded. The parties, or either of them, shall thereafter submit
a proposed decision including an award of any such costs, or a
denial thereof, for entry by the Court.
Rule 233. Miscellaneous
For provisions prohibiting the inclusion of a claim for
reasonable litigation and administrative costs in the petition,
see Rules 34(b) (petition in a deficiency or liability action),
211(f) (petition in a revocation action), and 241(c) (petition in
a partnership action). For provisions regarding discovery, see
Rule 70(a)(2). For provisions prohibiting the introduction of
evidence regarding a claim for reasonable litigation or
administrative costs at the trial of the case, see Rule 143(a).
