                        T.C. Memo. 2002-232



                      UNITED STATES TAX COURT


            JOSEPH D. PARK AND MI JUNG PARK, ET AL.,1
                         Petitioners v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket Nos. 13778-99, 13784-99,     Filed September 18, 2002.
                 13789-99.


     Michael G. Little, for petitioners.

     William R. McCants, for respondent.



                        MEMORANDUM OPINION


     FOLEY, Judge:   This matter is before the Court on

petitioners’ motion for award of reasonable litigation costs




     1
        Cases of the following petitioners are consolidated
herewith: John N. Park, docket No. 13784-99; and David S. and
Deborah Park, docket No. 13789-99. John N. Park, however, is not
seeking litigation costs.
                                 - 2 -

pursuant to section 7430 and Rule 231.2    This Court ruled in

favor of petitioners, in Park v. Commissioner, T.C. Memo. 2002-

50, and we incorporate herein by reference the facts set forth in

that opinion.

                              Background

     John, Joseph, and David Park are brothers who immigrated to

the United States from Korea in the 1980s.     During the years in

issue, Joseph and David Park were married to Mi Jung and Deborah

Park, respectively.     Petitioners moved to Florida to establish

businesses and resided there when they filed their petitions.

     Respondent was suspicious of the inconsistencies between

petitioners’ lifestyles and their reported income for tax years

1990 to 1994.     Respondent believed petitioners were “skimming”

money from their businesses, “laundering” money, or buying

discounted traveler’s checks and selling them at a profit.

         Kaharudin Latief and Ferry Tandiono, both wealthy

Indonesian businessmen, transferred more than $9 million, via

wire transfers and traveler’s checks, to petitioners.

Petitioners worked together on several of the business ventures

and would, at times, transfer funds amongst themselves.      In

addition, Mr. Tandiono provided David with over $1 million to buy



     2
        Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect at relevant times, and all
Rule references are to the Tax Court Rules of Practice and
Procedure.
                                - 3 -

a home.   In 1997, David transferred the home to Mr. Tandiono, who

held a mortgage on the property.   At the time of the filing of

the petition in 1999, David resided in this home, paying repair

and miscellaneous expenses but no rent.     Respondent reconstructed

petitioners’ incomes using the cash expenditures method and

determined unreported income of over $9 million relating to the

years in issue.   In February 2002, this Court held that the

amounts in dispute were nontaxable gifts.

     On March 22, 2002, petitioners filed their motion for award

of litigation costs (motion).   Petitioners’ motion contained a

statement that petitioners each had a net worth of less than $2

million when they filed their petitions.     Each petitioner also

submitted a one-page affidavit attempting to verify his or her

net worth.   On May 1, 2002, respondent filed his response and

objection to the motion for litigation costs (response and

objection), specifically contending that the affidavits were

insufficient to establish net worth.     On June 20, 2002,

petitioners then filed a supplement to motion for award of

litigation costs (supplement) in reply to respondent’s response

and objection but did not address the issue of net worth.

                            Discussion

     The prevailing party in a Tax Court proceeding may recover

litigation costs.   Sec. 7430(a); Rule 231.    Except as provided in

section 7430(c)(4)(B), petitioners bear the burden of proving
                               - 4 -

that they meet each of the requirements of section 7430.      Rule

232(e).   Their failure to meet any one of the requirements of

section 7430 will preclude an award of costs.    Minahan v.

Commissioner, 88 T.C. 492, 497 (1987).

     Petitioners may recover litigation costs only if they meet

the net worth requirements referenced in 28 U.S.C. sec.

2412(d)(1)(B).   Sec. 7430(c)(4)(A)(ii).   An individual’s net

worth must not exceed $2 million at the time of filing of the

petition to commence a civil proceeding.    28 U.S.C. sec.

2412(d)(2)(B); Stieha v. Commissioner, 89 T.C. 784, 790 (1987).

A motion for litigation cost requires “A statement that the

moving party meets the net worth requirements, * * * which

statement shall be supported by an affidavit executed by the

moving party”.   Rule 231(b)(4).

     If a taxpayer, in a motion for litigation costs, fails to

sufficiently establish net worth, and the Commissioner challenges

whether the taxpayer has met the net worth requirements, the

taxpayer must provide additional evidence.    See Estate of Hubberd

v. Commissioner, 99 T.C. 335, 341 (1992); Dixson Intl. Serv.

Corp. v. Commissioner, 94 T.C. 708, 719 (1990); see also Johnson

v. Commissioner, T.C. Memo. 1999-127 (holding that when a

taxpayer submits only a statement, accompanied by an affidavit,

the Court is not “compelled to accept petitioners’

unsubstantiated, conclusory, and self-serving assertion that they
                                - 5 -

meet the net worth requirements”, and that “the taxpayer must

provide supporting information (i.e., evidence) to establish his

net worth”).    Like the taxpayers in Dixson, petitioners “failed

to provide any supporting information to establish their net

worth or to even address the issue in their supplemental motion”.

Dixson Intl. Serv. Corp. v. Commissioner, supra at 719.

     Petitioners received over $9 million from Messrs. Latief and

Tandiono and transferred significant amounts of money amongst

themselves.    In addition, David has maintained his close

relationship with Mr. Tandiono.    Indeed, he resided in Mr.

Tandiono’s $2.4 million home at the time the petition was filed,

and we have no knowledge of assets acquired up to that time.

Respondent contends that the affidavits petitioners submitted are

insufficient and that petitioners failed to produce additional

evidence (e.g., net worth statements or financial statements)

demonstrating that their net worth is less than $2 million.    We

agree.

     It is reasonable, under the unusual facts of this case, to

believe that petitioners may have considerable net worth.

Petitioners, however, submitted no evidence to support their

affidavits and failed to address the issue in their supplement.

See id.; Johnson v. Commissioner, supra; cf. Prager v.

Commissioner, T.C. Memo. 1994-420 (holding that the taxpayer, who

initially produced a one-sentence affidavit, satisfied the net
                                 - 6 -

worth requirement after providing a balance sheet in response to

the Commissioner’s opposition).    We will not accept petitioners’

unsubstantiated assertions of net worth.       Accordingly, we hold

that petitioners are not entitled to an award of litigation

costs.

     Contentions we have not addressed are irrelevant, moot, or

meritless.

     To reflect the foregoing,



                                         An appropriate order will be

                                 issued denying petitioners’ motion,

                                 and decisions will be entered under

                                 Rule 155.
