IRS Independent Office of Appeals  Recovering Administrative and Litigation Costs (Part IV)

IRS Independent Office of Appeals  
Recovering Administrative and Litigation Costs (Part IV)

You are not the prevailing party if:

The United States establishes that its position was substantially justified.

If the IRS does not follow applicable published guidance, the United States is presumed to not be
substantially justified. This presumption is rebuttable.

Applicable published guidance means regulations, revenue rulings, revenue procedures,
information releases, notices, announcements, and, if they are issued to you, private letter
rulings, technical advice memoranda and determination letters.

The determination of whether the Government’s position was substantially justified will also
consider the outcome of the same issue(s) or position(s) in other cases the Government has
already litigated.

In the context of administrative proceedings, Appeals will determine who is the prevailing party.
You must file your claim for administrative costs no later than the 90th day after the IRS mails
(or otherwise furnishes) you the final determination of tax, penalty or interest. This means that
you may receive administrative costs from the IRS without going to court. If your application for
administrative costs is denied, you may appeal the determination to the U.S. Tax Court no later
than the 90th day after the IRS mailed you the denial letter.

In the context of court proceedings, a court will decide who is the prevailing party. You must
follow applicable court rules when filing your claim for costs.

Next week: Additional Information on your right to appeal (Part I)
(IRS Publication 5) (TTT 091724)