                          T.C. Memo. 1998-313



                      UNITED STATES TAX COURT



                  JAMES TRIPLETT, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 27864-96.                       Filed August 25, 1998.



     James Triplett, pro se.

     James W. Ruger and John A. Freeman, for respondent.



                          MEMORANDUM OPINION

     PAJAK, Special Trial Judge:     This case is before the Court

pursuant to petitioner's motion for litigation and administrative

costs under section 7430 and Rules 230 through 233.      Unless

otherwise indicated, all section references are to the Internal

Revenue Code.   All Rule references are to the Tax Court Rules of

Practice and Procedure.

     Petitioner's motion was filed on May 7, 1998.      Petitioner
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             claimed the following administrative and litigation

costs:

     Administrative Cost                             Estimated

         1. Long Distance Calls                       $   60
         2. Costs of study, analysis,
            test, project necessary for the
            preparation of taxpayer's appeal-
            Attorney and CPA costs                     7,125
         3. Meals, Mileage & Parking                     300
         4. Postage                                       50
         5. Photocopying Costs -
            includes 'to and from travel' to
            copy machine facility                      2,200
         6. Office wages for net worth computation
            work                                       1,500

     Litigation Cost

      7. Long Distance Calls                               45
      8. Meals, Mileage & Parking                         250
      9. Postage                                           50
     10. Computer Research Costs                          850
     11. Photocopying Costs-
         includes 'to and from travel' to
         copy machine facility                         1,500
     12. Filing fee                                       50
     13. Office wages litigation                       1,200
     14. Total                                       $15,1201
     1
         Actual total is $15,180.

    Respondent's response was filed on June 29, 1998.            By order

dated July 6, 1998, this case was assigned to Special Trial Judge

John J. Pajak pursuant to Rules 180-183 for the purpose of

disposing of petitioner's motion.

     Neither party requested a hearing on petitioner's motion.

Rule 232(a).      Accordingly, we rule on petitioner's motion on the

basis of the parties' submissions and the record in this case.

The underlying issues raised in the petition were settled by a

stipulation of settlement.          At the time the petition was filed

petitioner resided in Columbus, Ohio.
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     By notice of deficiency, respondent determined the following

deficiency and additions to tax in petitioner's 1981 Federal

income tax:

                                    Addition to Tax
Deficiency   Sec. 6651(a)(1)   Sec. 6653(a)(1)   Sec. 6653(a)(2)   Sec. 6654
$14,172.83      $3,543.21          $708.64              1          $1,085.00

     1   50 percent of the interest due on $14,172.83

     Under section 7430, a taxpayer may be awarded a judgment for

reasonable administrative and litigation costs if the taxpayer

establishes certain criteria and if respondent fails to establish

that the position of respondent was substantially justified.

Respondent concedes that petitioner substantially prevailed for

purposes of section 7430(c)(4)(A)(i).          Respondent maintains that

his position was substantially justified.

     In deciding the merits of a motion for litigation and

administrative costs, there are two time periods the Court must

consider.     For administrative costs, the Court considers the

reasonableness of respondent's position from the earlier of the

date of receipt by the taxpayer of the notice of decision by the

Office of Appeals or the date of the notice of deficiency.              Sec.

7430(c)(7)(B).      For litigation costs, the Court considers the

reasonableness of respondent's position from the date the answer

was filed.     Sec. 7430(c)(7)(A).      Whether respondent's position

was substantially justified turns on a finding of reasonableness,

based upon all the facts and circumstances, as well as the legal

precedents relating to the case.         Pierce v. Underwood, 487 U.S.
                                - 4 -


552 (1988); Sher v. Commissioner, 89 T.C. 79, 84 (1987), affd.

861 F.2d 131 (5th Cir. 1988).   A position is substantially

justified if the position is "justified to a degree that could

satisfy a reasonable person."   Pierce v. Underwood, supra at 565.

The Court must "consider the basis for respondent's legal

position and the manner in which the position was maintained."

Wasie v. Commissioner, 86 T.C. 962, 969 (1986).    The fact that

respondent eventually loses or concedes a case does not establish

an unreasonable position.   Sokol v. Commissioner, 92 T.C. 760,

767 (1989).   The reasonableness of respondent's position and

conduct necessarily requires considering what respondent knew at

the time.   DeVenney v. Commissioner, 85 T.C. 927, 930 (1985).

     In this case, the notice of deficiency was issued on

September 30, 1996, the petition was filed by petitioner pro se

on December 27, 1996, the amended petition was filed on March 3,

1997, and respondent's answer to the amended petition was filed

on April 11, 1997.

     Petitioner's 1981 Federal income tax return was due on April

15, 1982.   The return was not timely filed.   In 1985, one of

respondent's revenue officers spent over 6 months in order to

collect certain taxes owed by entities controlled by petitioner

and to ascertain whether petitioner had filed his own individual

income tax returns.   The revenue officer discovered petitioner

had not filed his 1981 individual income tax return.    Thereafter,
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petitioner and the revenue officer discussed the unfiled 1981 tax

return.   On September 13, 1985, petitioner sent his untimely

original 1981 income tax return dated "9/13/85", which showed no

tax due, to the revenue officer.    Petitioner in his cover letter

indicated that the return was recently prepared.

     When the revenue officer received petitioner's document, he

found one "Schedule C" business was on a marked-up 1982 Form

1120S, U.S. Small Business Corporation Income Tax Return, and

another on a marked-up 1980 Form 990, Return of Organization

Exempt from Income Tax.   Petitioner called and asked the revenue

officer if it was "all right".    The revenue officer told him that

the businesses should be reported on Schedules C.    Apparently, it

was agreed that the return would be returned to petitioner,

together with the proper schedules for preparing a correct

return.   The revenue officer indicated in his records that

petitioner would complete the schedules and file a correct

return.   Petitioner failed to do so.    The revenue officer did not

retain a copy of the untimely original 1981 income tax return in

respondent's administrative file.    Shortly thereafter,

respondent's Criminal Investigation Division (C.I.D.) commenced a

criminal investigation of petitioner.

     Respondent finished the examination of petitioner's income

tax for the tax year 1981 after the conclusion of the criminal
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investigation and conviction of petitioner for filing a false

income tax return for the tax year 1984.

     On November 2, 1995, respondent sent a 30-day letter to

petitioner, which afforded petitioner an opportunity for an

Appeals conference with respondent's Office of the Regional

Director of Appeals.

     On December 27, 1995, respondent received petitioner's

protest of respondent's determination of his 1981 income tax

liability.   Petitioner failed to raise a statutory period of

limitations defense in his protest.    In the Appeals Transmittal

Memorandum and Supporting Statement, respondent's Appeals Officer

stated that petitioner did not raise any tax issues relating to

the period in issue, instead accusing the Internal Revenue

Service and its employees of criminal acts.

     Respondent issued the notice of deficiency to petitioner on

September 30, 1996.

     We must identify the point at which the United States is

first considered to have taken a position, and then decide

whether the position taken from that point forward was or was not

substantially justified.   The "substantially justified" standard

is applied as of the separate dates that respondent took

positions, first in the administrative proceedings and afterwards

in the proceedings in this Court.
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     There is no evidence in the record of a notice of decision

by the Office of Appeals.    For purposes of the administrative

proceedings in this case, respondent's position is that which was

articulated in the notice of deficiency, issued on September 30,

1996.   For purposes of the court proceedings in this case,

respondent's position is that which is set forth in the answer to

the amended petition on April 11, 1997.

     We now consider the administrative costs issue.    Petitioner

failed to comply with the requirements of Rules 231(d) and 232(d)

even though he asserted in his motion that he had read Rule 232.

He did not provide us with the detailed information required

under the Rules.   Thus, we are presented with a motion which on

its face contains mere estimates.    Without more, we cannot say

that these costs are reasonable.    In fact, we believe some of the

costs are patently unreasonable, e.g., $2,200 for photocopying.

There is no indication in the record that any attorney or C.P.A.

was involved in this case.    We have long held that fees

recoverable under section 7430 do not include a pro se litigant's

own time, even if that person should be an attorney.     Frisch v.

Commissioner, 87 T.C. 838 (1986).    On this record, we cannot find

that petitioner incurred "reasonable administrative costs" within

the meaning of section 7430.

     Further, in the notice of deficiency, respondent determined

a deficiency based on the net worth method, made other
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adjustments, and determined additions to tax.   Respondent was

entitled to use any reasonable method to determine petitioner's

income.   Petzoldt v. Commissioner, 92 T.C. 661, 693 (1989);

Michas v. Commissioner, T.C. Memo. 1992-161.    Accordingly, we

find that respondent's administrative position was substantially

justified.

     We now turn to the proceedings before this Court.    On

March 3, 1997, petitioner filed his amended petition.    Petitioner

did not raise the period of limitations issue until he filed his

amended petition, more than 5 months after respondent issued the

notice of deficiency.   If petitioner were deemed to have filed a

return in 1985, the period of limitations would have run.      See

sec. 6501.

     Section 7430(b)(1) provides in pertinent part that:    "A

judgment for reasonable litigation costs shall not be awarded

* * * in any court proceeding unless the court determines that

the prevailing party has exhausted the administrative remedies

available to such party within the Internal Revenue Service."        To

meet this requirement, a party must disclose to the Appeals

Office "all relevant information regarding the party's tax matter

to the extent such information and its relevance were known or

should have been known to the party" at the time of the

conference.   Sec. 301.7430-1(b)(2), Proced. & Admin. Regs.     As

set forth above, petitioner failed to discuss his tax issues and
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failed to raise the period of limitations issue during the

conference.   Accordingly, we determine that petitioner did not

exhaust his administrative remedies available within the Internal

Revenue Service.   Thus, on this basis alone petitioner is not

entitled to the litigation costs requested in his motion.

     In his answer to the amended petition, respondent requested

that the determination in the notice of deficiency in all

respects be approved.   On June 4, 1997, within 60 days after

answering the amended petition, respondent wrote to petitioner

and requested a copy of the 1981 income tax return that

petitioner had attempted to file through the revenue officer.

Respondent received no answer from petitioner.    On July 22, 1997,

respondent sent a followup letter to petitioner.    On August 11,

1997, petitioner responded by asking whether respondent had a

copy of the 1981 income tax return.    Petitioner did not reveal

that he had the original document in his possession.    On November

18, 1997, respondent replied to petitioner's letter, stating that

respondent did not have a copy of the return and requested a copy

of the return from petitioner for the third time.    Petitioner did

not provide respondent with a copy of the 1981 tax return until

March 20, 1998, the Friday before the Monday, March 23, 1998,

trial session during which the case was to be heard.    Respondent

then conceded the case, even though the exchange of the document

by petitioner at this late date violated the Court's Pre-Trial
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Order.   At that time in 1998, respondent determined the 1981

return tendered by petitioner to the revenue officer in 1985

constituted a valid tax return and conceded this case solely on

the grounds that the period of limitations had run.    Although

respondent ultimately conceded this matter, we find the revenue

agent had a reasonable basis in fact and in law to question the

return tendered in 1985.    Based on these facts, the position of

the United States before this Court was substantially justified.

     Further, we also conclude that petitioner unreasonably

protracted the Court proceedings.   Sec. 7430(b)(3).   Petitioner

delayed resolution of this case in this Court proceeding because

he did not provide the copy of the 1981 return to respondent

until the eve of trial.    Among other things, petitioner's action

caused respondent to submit a motion under Rule 91(f), a trial

memorandum, and three motions to quash subpoenas.   The Court held

a conference call with the parties and by a March 20, 1998, Order

set respondent's motions to quash subpoenas for hearing on March

23, 1998.   All these acts could have been avoided if petitioner

had provided respondent the copy of petitioner's 1981 income tax

return in response to respondent's June 4, 1997, letter.

     For all the foregoing reasons, petitioner's motion for

litigation and administrative costs is denied.

                                          An appropriate order and

                                     decision will be entered.
