The Tax Court in Phillips (referred to as Phillips II) has set helpful guidelines for making a determination of when the IRS has taken a position which is not substantially justified. This is one of the tests that must be satisfied before a court of proper jurisdiction can grant a motion for litigation costs pursuant to Section 7430. Phillips I also addresses the issue of settlement attempts, and whether they are needed to exhaust administrative remedies, which is a further requirement for Section 7430 treatment. The following discussion describes the legislative purpose of Section 7430 and its effectiveness in promoting fee-shifting. Attention will be focused upon Phillips and other cases in analyzing the tests of Section 7430.
Horvitz, Jerome S. and Hebble, Annette
""Substantial Justification" Further Defined by Phillips,"
Akron Tax Journal: Vol. 6
, Article 1.
Available at: https://ideaexchange.uakron.edu/akrontaxjournal/vol6/iss1/1