                        T.C. Memo. 2007-108



                      UNITED STATES TAX COURT



  NEIL MALCOLM COWIE AND KAREN CHRISTINE SHUNK, Petitioners v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 1189-06.                 Filed April 30, 2007.



     Neil Malcolm Cowie and Karen Christine Shunk, pro se.

     William J. Gregg, for respondent.



                        MEMORANDUM OPINION


     WELLS, Judge:   The instant matter is before the Court on

petitioners’ motion for reasonable administrative and litigation
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costs1 pursuant to Rule 2312 and section 7430.   The issues we must

decide are whether petitioners were the prevailing party within

the meaning of section 7430 and whether petitioners have

substantiated any recoverable costs.     For the reasons stated

below, petitioners’ motion for reasonable costs will be denied.

                            Background

     At the time of filing the petition, petitioners resided in

Washington, D.C.   Petitioner Neil M. Cowie (Mr. Cowie) is an

attorney licensed to practice law in the Commonwealth of

Virginia.   Petitioners proceeded pro se at all times relevant to

the instant motion.

     Mr. Cowie and his father, Dr. James B. Cowie (Dr. Cowie),

agreed in August 1998 that Mr. Cowie would invest funds provided

by Dr. Cowie for Dr. Cowie’s benefit.     To avoid paying two sets

of transaction fees and to save time, Mr. Cowie deposited funds

provided by Dr. Cowie into Mr. Cowie’s existing brokerage

account.




     1
      Although petitioners titled the instant motion “MOTION FOR
LITIGATION COSTS”, it appears that petitioners are seeking both
administrative and litigation costs. We will consider the
instant motion as a motion for both administrative and litigation
costs.
     2
      Unless otherwise indicated, all Rule references are to the
Tax Court Rules of Practice and Procedure, and all section
references are to the Internal Revenue Code, as amended.
                               - 3 -

     Mr. Cowie provided regular reports regarding the investments

to Dr. Cowie.   Likewise, Mr. Cowie provided the information

necessary for Dr. Cowie to complete his annual tax returns.

     Mr. Cowie and Dr. Cowie reported their respective shares of

the taxable transactions from Mr. Cowie’s brokerage account on

their tax returns.   The brokerage firm, however, issued only one

Form 1099-B, Proceeds From Broker and Barter Exchange

Transactions 2003, to Mr. Cowie reporting all of the account’s

taxable activity.

     On February 7, 2005, respondent sent petitioners a draft

CP2501 notice listing 75 items where a discrepancy occurred

between the amounts reported by the brokerage firm on Form

1099-B, and those reported on petitioners’ return for taxable

year 2003.   On March 31, 2005, petitioners responded, stating

that the full amount of each transaction was reported by Mr.

Cowie and Dr. Cowie on their respective returns and providing

supporting information.

     Petitioners received a CP2000 notice dated June 20, 2005,

stating that respondent had not received a response to the

February 7, 2005, notice.   On June 22, 2005, petitioners sent

their response again.   Subsequently, petitioners received a

letter dated August 22, 2005, that requested that petitioners

provide information on a completed Schedule D, Capital Gains and

Losses.
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     On September 2, 2005, petitioners telephoned the Internal

Revenue Service (IRS) to determine what additional information

was needed.   The IRS representative indicated that petitioners

should provide Dr. Cowie’s name, address, and Social Security

number.   Petitioners allege they sent the IRS a facsimile with

Dr. Cowie’s information on September 5, 2005.

     The September 5, 2005, facsimile was not in the

administrative file when respondent answered the petition.

Respondent’s counsel received this facsimile from petitioners on

March 13, 2006.   Respondent’s counsel forwarded this facsimile to

the Appeals Office.

     On October 17, 2005, respondent issued a statutory notice of

deficiency to petitioners.   The notice determined income tax due

and an addition to tax for taxable year 2003.   Respondent based

the determination on information from third-party payors which

indicated that petitioners underreported interest, dividend, and

capital gain income of $2,180, $1,016, and $287,110, respectively.

The underreported income resulted in a determined deficiency of

$98,541, plus penalties and interest of $19,708.

     On January 17, 2006, petitioners filed their petition.   On

October 4, 2006, the parties filed a stipulation with the Court

disposing of all of the issues raised in the notice of deficiency.

On January 12, 2007, petitioners filed the instant motion.
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                              Discussion

     The prevailing party in a Tax Court proceeding may be

entitled to recover administrative and litigation costs.    See sec.

7430(a); Rule 231.     However, a taxpayer will not be treated as the

prevailing party if the Commissioner’s position was substantially

justified.     Sec. 7430(c)(4)(B); see Pierce v. Underwood, 487 U.S.

552, 565 (1988).    The fact that the Commissioner concedes is not

determinative of the reasonableness of the Commissioner’s

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

taxpayer bears the burden of proving he meets the requirements in

section 7430 for an award of costs, except that the taxpayer will

not be treated as the prevailing party if the Commissioner

establishes that the position of the Commissioner was

substantially justified. See Rule 232(e).

     The Court determines the reasonableness of respondent’s

position as of the time respondent took the position.    Sec.

7430(c)(7).    Respondent took a position in the administrative

proceeding as of the date of the notice of deficiency.    Sec.

7430(c)(7)(B).    In the judicial proceeding, respondent took a

position when respondent filed the answer.    Sec. 7430(c)(7)(A);

Huffman v. Commissioner, 978 F.2d 1139, 1144-1147 (9th Cir. 1992),

affg. in part, revg. in part on other grounds and remanding T.C.

Memo. 1991-144.    Respondent’s administrative and litigation

positions are substantially justified if they have a reasonable
                               - 6 -

basis in both law and fact.   See Maggie Mgmt. Co. v. Commissioner,

108 T.C. 430, 443 (1997).   Respondent is entitled to a reasonable

amount of time to evaluate information before changing his

position or conceding an issue.   See Sokol v. Commissioner, 92

T.C. 760, 766-768 (1989).

     We conclude that respondent’s position was reasonable and

substantially justified in both the administrative and litigation

proceedings.   A significant factor in determining whether the

Commissioner’s position is substantially justified as of a given

date is whether the taxpayer has presented all relevant

information under the taxpayer’s control to the appropriate IRS

personnel.   Sec. 301.7430-5(c)(1), Proced. & Admin. Regs.

Petitioners failed to provide the requisite information about Dr.

Cowie for respondent to verify that all the income from the

brokerage account had been reported before September 5, 2005.

Petitioners allege that on that date they sent to respondent a

facsimile containing that information, but respondent’s counsel

did not have that information until after the answer was filed.

Once respondent’s counsel sent the requisite information to the

Appeals Office, respondent conceded the instant case.

Accordingly, we hold that respondent’s position in the

administrative and litigation proceedings was substantially

justified, and that petitioners are not entitled to recover their

administrative or litigation costs.
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     Petitioners bear the burden of proving the reasonableness of

the costs claimed.   See Rule 232(e); Powers v. Commissioner, 100

T.C. 457, 491 (1993), affd., in part, revd. in part and remanded

43 F.3d 172 (5th Cir. 1995).   Petitioners proceeded pro se.   A pro

se litigant, even though an attorney, is not entitled to an award

of attorney’s fees under section 7430.     Frisch v. Commissioner, 87

T.C. 838 (1986).   Congress intended section 7430 as a fee shifting

statute.   Id. at 840.   However, petitioners “did not pay or incur

fees for legal services”.    Id. at 846.

     Additionally, petitioners did not specify an award amount.

The motion lists only “at least 15 hours on the telephone”, “at

least twenty five hours generating the Petition”, “at least ten

hours generating this motion”, and “many additional hours

marshalling and copying paperwork”.     The recitation of time spent

does not include dates or descriptions of the work done.

Petitioners argue that Mr. Cowie’s time is worth at least

$125 per hour.3




     3
      $125, as increased by a cost-of-living adjustment, is the
maximum hourly rate provided in sec. 7430(c)(1)(B)(iii), absent
special circumstances.
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     We have considered all of petitioners’ contentions, and, to

the extent they are not addressed herein, they are irrelevant,

moot, or without merit.

     To reflect the foregoing,


                                             An appropriate order and

                                         decision will be entered.
