Morreale v. Commissioner
T.C. Memo. 2021-90

On July 15, 2021, the Tax Court issued a Memorandum Opinion in the case of Morreale v. Commissioner (T.C. Memo. 2021-90). The primary issue presented in Morreale v. Commissioner was whether the petitioner was entitled for reasonable litigation fees from the IRS. Background to Morreale v. Commissioner The petitioner filed a Tax Court petition in November 2017 disputing certain adjustments to his return. The petitioner and the IRS settled in January 2019, with the IRS agreeing to two adjustments and conceding all penalties.  In February 2019, the petitioner filed a motion for reasonable litigation or administrative costs pursuant to IRC § 7430. When Costs are Reasonable IRC § 7430(a) authorizes an award for “reasonable administrative costs [and] reasonable litigation costs” to the “prevailing party” in a Tax Court dispute. A party that otherwise qualifies as a “prevailing party” will not be entitled to an award if the IRS can prove…

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