Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-89-03058/USCOURTS-ca10-89-03058-0/pdf.json

Nature of Suit Code: 870
Nature of Suit: Tax Suits
Cause of Action: 

---

- FI LED 

United States Court of Appeals 

Tenth Ci:rnit 

UNITED STATES COURT OF APPEALS UG 2 7 199 

TENTH CIRCUIT 

KENTON C. GRANGER and VERNA M. ) 

ROBERT L. HOECKER 

Clerk 

GRANGER, ) 

) 

Plaintiffs/Appellee,) 

vs. No. 89-3058 

UNITED STATES OF AMERICA, 

) 

) 

) 

) 

) 

(D.C. CIV. No. 87-2455-0) 

(D. Kansas) 

Defendant/Appellant) 

ORDER AND JUDGMENT* 

Before BRORBY and BARRETT, Circuit Judges, and WEST, District 

Judge. ** 

In this matter, the taxpayers obtained a refund from the 

Internal Revenue Service (IRS) through district court litigation. 

Subsequent to a jury verdict, the trial court awarded litigation 

costs to the taxpayers. The government has appealed the award of 

these litigation costs. Under Title 26 U.S.C. § 7430, litigation 

costs may be recovered if the government's position was not 

substantially justified. The award of litigation costs is further 

premised on the taxpayer's exhaustion of administrative remedies 

and proof of net worth less than two million dollars. 

* . . . This order and Judgment has no precedential value and shall 

not be cited, or used by any court within the Tenth Circuit, except 

for purposes of establishing the doctrines of the law of the case, 

res judicata, or collateral estoppel. 10th Cir. R. 36.3. 

** The Honorable Lee R. West, United States District Judge for 

the Western District of Oklahoma, sitting by designation. 

Appellate Case: 89-3058 Document: 010110041588 Date Filed: 08/27/1990 Page: 1 
... 

On oral argument, the government urges that the litigation 

award be reversed because the government's position was 

substantially justified during trial. The government also urges 

that the taxpayers neither exhausted their administrative remedies 

nor proved their net worth. 

This Court disagrees with the government's position in all 

respects. First, it is clear to this Court that the government's 

position was not substantially justified against these taxpayers. 

Further, the government admitted in its pleadings that the 

taxpayers had exhausted their administrative remedies, but now 

urges this Court to interpret that such admission was for the 

particular purpose of allowing taxpayers to go to district court, 

but not for the purpose of allowing taxpayers to recover litigation 

costs. This Court will not allow such inconsistent positions being 

maintained during the course of litigation. Finally, this Court 

notes that during taxpayers' motion to obtain litigation costs, the 

government never raised the exhaustion of administrative remedies 

issue nor the issue of the taxpayers' net worth. 

This Court will not prolong a litigation which was not 

substantially justified in order to allow the government to 

eventually assert all its positions regarding the matter. The 

taxpayers have suffered sufficiently throughout this process. 

Accordingly, this Court will not consider matters which the 

government failed to raise at the trial level. 

2 

Appellate Case: 89-3058 Document: 010110041588 Date Filed: 08/27/1990 Page: 2 
The trial court's award of litigation costs is AFFIRMED in its 

entirety. 

ENTERED BY THE COURT 

Lee R. West 

U.S. District Judge 

3 

Appellate Case: 89-3058 Document: 010110041588 Date Filed: 08/27/1990 Page: 3