TAX COURT OPINION

Case: Richard & Fiorella Hongsermeier
Docket Number: 29643-86
Judge: Beghe
Opinion Type: memo
Filed: 11/25/2009
Pages: 75

01 T .C . Memo . 2009-27 3 UNITED STATES TAX COUR T RICHARD AND FIORELLA HONGSERMEIER, Petitioners v . COMMISSIONER OF INTERNAL REVENUE, Responden t Docket No . 29643-86 . Filed November 25, 2009 . Michael Louis Minns and Enid M . Williams, for petitioners . Henry E . O'Neill ,, for respondent . Background . . . . . . . . CONTENTS . . . . . . . . . . . I . Kersting Tax Litigation Through Dixon V Remand II . Dixon V Remand Proceeding . . A . Houston , Status Conference . . . . . . . . . . . . . . . . . . . . . . 8 . 8 . . 1 4 . . 15 B . Los Angeles Status Conference and Thompso n Tax Records for Years Other Than 1979, 1980 , . and 1981 . . . . . ' . . . . . . . . . . . . 1 7 SERVED NOV 2 5 2009 C . , Las Vegas Specal' Session D ._ Los Angeles . Special Session E . iWashington, D .C, Special Session Petitioners' Opening Brie f Our Determination of Scope of Thompso n Settlement and Awards of Appellate Fee s Minns' Motion for. Reconsideratio n III . The Minns Law Office's Dixon V .Reman d Proceeding'Fe e and,Expense Requests A . General Rule s Meaning of "Lncurred" Under Sectio n 6673 ( a) (2) .(B ) IL . Reasonable . Hourly Rates A . Minns' and Williams' Hourly Rates . 30- 32 33 .Bankruptcy Against .McWade and 44 - 3 - 5 . Client Relations . . . . . 6 ., Motion for Reconsideration . . . . . 7 . Entries Related to L . T . Bradt . . . 8 . Entries Related to Joseph Nunan . 9 . Chapin Billing Dispute 10 . Closed Cases . . 11 . Overhead Expenses . . . . . a . Secretary's Services . . . . . . . . . . . . . . b . Overtime Air Conditioning . 12 . Inadequately Described Entries 13 . Miscellaneous . . . . . . a . Minns' Services b . Williams' Services c . Paralegal Services . d . Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 . Total Reductions for Entries Not Reasonabl y Related to Dixon,V Remand Proceeding C . Reliability of Documentation . . . D .' Duplicative and Excessive Efforts 1 . Excessive Fees and Expenses . . . . . . . . . . . . . . . 2 . Reduction for Duplicative and Excessive . Efforts . . . . . . . . . . . . . . . . . . 4 5 4 9 5 0 5 1 5 1 5 2 5 4 5 5 5 6 5 6 5 8 5 8 6 5 6 7 6 8 6 8 6 9 7 0 7 1 7 3 Conclusion MEMORANDUM OPINIO N BEGHE, Judge : This is ;thelthird opinion in our third set o f opinions on various petitioners' applications for attorney's fees and expenses incurred in the Kersting tax shelter projec t litigation after the discovery and disclosure of the misconduc t of respondent's trial counsel in Dixon v . Commissioner , T .C . Memo. 1991-614 (Dixon II), vacated and remanded, per curiam sub nom . DuFresne v . Commissioner , 26 F .3d 105 (9th Cir . 1994), o n remand Dixon v . Commissioner , T .C . Memo . 1999-101 (Dixon III ) revd . and remanded 316 F .3d 1041 (9th Cir . 2003)-(Dixon V), o n remand Dixon v . Commissioner , T .C . Memo . 2006-90 (Dixon VI) , supplemented by Dixon v . Commissioner , T .C . Memo . 2006-190 (Dixo n VIII), on appeal (9th Cir ., Dec . .28, 2006, and Jan . 3, 3 2007) . In our first attorney 's fees .opinion, Dixon v . Commissioner , T .C . Memo . 2000-116 (Dixon IV) (supplementing Dixon III), we awarded Kersting project petitioners, attorney' s fees and expense s under section 6673 (a) (2)(B)1 for services in this Court rendered by Attorneys Joe Alfred Izen, Jr . (Izen) :, Robert ; Allen Jones (Jones), and Robert Patrick,Sticht (Sticht) during the reman d from DuFresne . 'Unless otherwise indicated, all section references are to the Internal Revenue Code in effect for the years at issue, and all Rule references are to the Tax Court Rules of Practice and Procedure . S - 5 - In the second set of attorney's fees opinions, Dixon-v . Commissioner , T .C . Memo . 2006-97 (Dixon VII), and Young v . Commissioner , T .C . Memo . 2006-189, we responded to the supplemental mandate of the Court of Appeals for-the Ninth Circuit to rule on Kersting project petitioners' requests for appellate attorney's fees and expenses incurred in the Dixon V appellate proceeding . In Dixon VII we awarded appellate attorney's fees and expenses under section 7430 to Kersting project petitioners represented in the Dixon V appeals by Porter & Hedges Attorneys John. R . Irvine (Irvine) and his partner, Henry G . Binder (Binder), and by Michael Louis Minns (Minns) . In Young we awarded appellate fees and expenses under . section 7430 to Kersting project petitioners represented in the Dixon V appeals by Izen and Jones . This third set of opinions pertains to fees and expenses incurred in this Court .during'the remand from Dixon V (Dixon V remand proceeding),2 which resulted in Dixon VI, supplemented by Dixon VIII,-determining the terms and benefits of the Thompso n 2Respondent and petitioners represented by Sticht reached a comprehensive settlement agreement regarding fees and expenses incurred from 1992 through 2006, including the Dixon :V remand proceeding, which superseded our award to Sticht's clients in Dixon IV . On Oct . 4, 2006, we ordered respondent to disburse $1,254,368 .11 to Sticht's clients in satisfaction of that agreement . Of this amount, approximately $237,000 wa s .attributable to fees for the services of Sticht and his associate in the Dixon V remand proceeding . - settlement'".',' In . our most .:recent-,,opinions', Dixon v . Commissioner , . 4132 -T . C . (+2009 .) (Dixon -IX),, ; . . and, Gridley v . Commissioner ,°T .,C .Memo .~ ,,,, 2009-89'(GridleyII) ; we awarded-fee s and expenses under~section-x6673 (a) ( .2) .'(B) ,for the respectiv e services of .Irvine, ' .Binder, and other Porter (cid:127)& Hedges ' attorneys ' and of „Jones ,in the-Dixon V .r remand ;proceeding .: In this .Memorandum Opinion"'we award fees and- expenses" under ., section .6673 (a) (2) ,(B) fo r .behalf ,of~ othe ! Hongsermeier test=case petitioners-and variou s test- case petitioners ;.in opinion will deal'with,the pending motion case and .(cid:127)non-test-case petitioners-t o expenses incurred in""the Dixon V,remand' .proceeding ._, ., Petitioners have submitted an amended request-for-$,967,37 94 , in fees and $21 ;525 .99~ain expenses ,-Respondent,,objects to th e hourly rates and number of,,hours ..,,cla med .as unreasonable ; re,spondent,-requests substantial reductions :-- After-considering petitioners',amended .reques t respondents', objections-to claimed hourlyrates,we will reduce- 'Petitioners .. dockets' :were consolidated ; in the Dixon V s remand? proceeding for the purposes of .,hearing ; briefing_ .and opinion,:with 26 other9docketed . caseslof Kersting projec t petitioners represented' by . Irvine, Iz'en' Jones ;, :and Sticht . 4Petit ioners' '. amended fee .,reques t :states .J that,. petitioners are requesting $967,362 :"21, whereas1,the total hours, listed i n petitioners ' : amended fee request -multiplied by,the : claimed ,hourl y rates come . to $967,-379 . - 7 - Minns', hourly rate from $500 to $350 per hour and reduce the claim for the services of his associate, Enid M . Williams (Williams), from $250 to $175 per hour . We will allow the requested hourly rates of $100 and $75 per hour for services of a paralegal and secretary . The rate reductions alone would reduce petitioners'. requested award by $285,363 .75 ($229,993 .50 attributable to Minns and $55,370 .25 attributable to Williams) to $682,015 .25 . 5 In response to respondent's objections to specific items in various categories of services, we will reduce petitioners' requested award by a total of 736 .89 hours for Minns, Williams, the paralegal, and the secretary, amounting to an additional $197,976 .50 reduction of petitioners' requested fee award, which would leave petitioners a fee award of $484,038 .75 . In addition to the above fee reductions attributable to respondent's specific objections, we Will reduce'petitioners'fee award across-the-.board by an"additional one-third (33-1/3 percent) of the remaining fee amount, amounting to $161,346 .25, to reflect "overlawyering" and lack of contemporaneous documentation . After subtracting this percentage reduction, we hold that petitioners are entitled to a fee award-of $323,692 .50 . 'Unless otherwise specified, all dollar amounts attributable to Minns' and Williams' services have been calculated using reduced rates of $350 per hour for Minns and $175 per hour for Williams . See infra Discussion, Part II . We also .reducepetitioners' requested expenses by $6(cid:127),236 .44 , leaving an ;expense . award of $15,28,9 .'55 ., Backgroun d ,,The underlying, facts in thesercases areRdescribed ; in Dixo n II,Dixon~III,Dixon IV ; Dixon VI, Dixon .Vll, Young v. . Commissioner , T .C# (cid:127),MemoF . 2006- .189,(cid:127) Dixon, VI(cid:127)II,, .Dixon IX, and Gridley II . The parties,,have provided-additional facts-„in . petitioners' fee request, as amended, and respondent' s objections The partiesshave-not requested an>evidentiary- . , hearing,, and, we have found as hearing unnecessary . . Cf .. Rule 232 (a) (2 ) I . Kersting,Tax Litigation, Through Dixon V .Reman d The Kersting tax,,shelter,,litigation arose from . respondent' s disallowance of-interest , deductions claimed .by participant s tax shelter . programs , promoted by .Henry , F . K ., Kersting (Mr . Kersting ) during the late 1970s andthe 1980s . Respondent' s determinations, of deficiencies against Kerstingitax shelte r participants eventually resulted in the docketing o f approximately~J .,,800 cases in the Tax .Court.,. . Most Kersting project petitioners entered into-,"piggyback agreements with,g respondent in which they agreed that their cases would b e resolved in accordance with a small number of test cases . Hongsermeiers were among,the 9 - In Dixon II the Court upheld the deficiencies resulting from Kersting tax shelter deductions claimed by the test-case petitioners . On June 9, 1992, after entr y, of the Court's decisions in Dixon II, respondent's'management .discovered tha t before trial respondent's trial attorney, Kenneth"W . McWade (McWade), and his supervisor, Honolulu,District Counsel William A . Sims (Sims), had .entered into secret settlement agreements with test-case petitioners John R . and Maydee Thompson (the Thompsons) and John R . and E . Maria Cravens (the Cravenses) . McWade and Sims had not disclosed the Thompson and Cravens settlements to their superiors, the Court, or the other test-case petitioners or their counsel . The primary purpose and final effect of the Thompson settlement was to provide the Thompsons refunds more than sufficient to pay the-fees of Luis-G . DeCastro (DeCastro), the Thompsons" attorney, to provide the appearance of independent representation of test-case petitioners in the test-case trial . Respondent filed a motion for an evidentiary hearing to determine whether the secret settlements had affected the .Court's decisions in Dixon .II . The Court denied respondent's motion for an evidentiary hearing, entered decisions giving effect to the Thompson and Cravens settlements, and'allowed to stand the decisions sustaining respondent's adverse determinations against the other test-case petitioners . We also denied motions to intervene in the Thompson~,and =Cravens ; cases filed by,1zen and ' Sticht on .behalf-of certain ;,test- case . and,,,non-test,-case 10 - .petitioners . ,The 'test-case petitioners _ (other ,than- the . Thompsons and the , Cravenses) and the non- .test) case ; petitioners* seeking : to., interven e appealed rto, the U .. S,.,, Court . of;.,Appeals,,-for the Ninth . Circuit Court , of ,Appeals vacated our ; decisions ,in, the test cases ', holding that an'-evidentiary hearing was needed , to determine ,whether th e misconduct _of- respondent,',s- counsel had . given,rise to, .-",a structural defect voiding . the judgment [in ,DixonAIh], a s fundamentally : unfair,, or whether, , despite ,the government's ; .- misconduct, the judgment, cann be upheld' . as harmless- error .!' DuFresne v . Commissioner , 26 F(cid:127) .3d at 107 . The ,Court .,of Appeal_s,, x directed the Tax Court, to hold such a,, hearing, and to consider-the ., In an unpublished,,,opinion, Adair .-. Commissioner , 2 6 , v (9th Cir : .1994), the DuFresne panel (Goodwin, Ferguson, .and - Trott, JJ . ),, affirmed our :denial s, of tithe ..motions _to ,,intervene the Thompson and Cravens, cases ton? the'ground,that„those decisions . had 'become 'final . To give of-fect kto(cid:127) the, ,direction,,of .the -Court-,,o f DuFresne ,to consider' .thenmerits of aa'l motion s affected, partiesr, ,a;we~ ,ordered& the consolidation - 11 - cases with the remaining test cases for the evidentiary hearing, briefing, and opinion required by the Dufresne mandate . In the course of that evidentiary hearing Izen sought discovery of documents pertaining to respondent's conduct . after the trial of the test cases . Izen alleged, . among other things, that respondent after May 1992 tried to conceal the fraudulent conduct of the Government attorneys in the test cases . We denied Izen's discovery requests, sustaining various privileges asserted by respondent . See Dixon III, PROCEDURAL HISTORY OF,EVIDENTIARY HEARING, III . Developments Following Initial Evidentiary Hearing , C . Denial of Mr . Izen's Motion T o I Compel Production of Documents . After the evidentiary hearing we=issued our opinion in Dixo n III, generally allowing the Court's decisions in .Dixon II' t stand and holding'that McWade' s and Sims ' misconduct did not create a structural defect that prejudiced the Court's decision in Dixon II but amounted to harmless error . However, we imposed sanctions against respondent by relieving test-case and non-test- case petitioners of liability for (1) the interest component o f the addition to tax for negligence under former section 6653(a), . and (2) the increased interest attributable to the higher rate prescribed in former section 6621(c) . See Dixon III . On April 1, 1999, 2 days after issuance of our Dixon III opinion, we referred: the (cid:127)°misconduct of McWade, Sims, and DeCastro,to the, Tax :' Court's Committee on Admissions, Ethics,',,, and-,Discipline . In Dixon IV wemp:osed'additional sanctions ;pursuant t o section 6673'(a) (2)';(B) by ° ordering respondent . to pay : ,attorney ! fees of -Kersting ,project . ;petitioners, to investigate and ;,preseh t the evidence of :McWade '. s .,and ,S'ims' n misconduct: to the Court . so doing, we. reduced, the . awardsof ;'fees , requested in ; Dixon IV b y .one-third across,-the-board to reflect varrious- .failures „of .,proof~ . The test .case petitioners - again :., appealed to,, the Court ;o f Appeals-for the, Ninth Circuit . We also certfiedat the case s non-test- case . petitioners' represented by, ;Izen, Sticht,4 Jones, and Declan J . O''Donnell (O'Donnell) for :interlocutory appeal :. » After , various procedural delays ;described more fully,=in Young v . Commissioner ,MOT .C..+°Memo ;; 200.6-189, the Court of(cid:127)Appeals accepte d the interlocutory appeals ofrthe nontest,cases but held them it abeyance pending resolution-o f the meantime Minns replaced Izen .as'appellate,attorney for'=the Dixons,, the -DuFresnes ,,,, :and the °Hongsermeiers , Later , Irvine ..'and .,Binder replacedMinns as appellate attorneys .for .,the . Dixons'and-the DuFresnes' : ,Minns -remained appellate .attor-ney .for ° the Hongsermeiers, and Izen .:remained appellate .:attorney .for the Youngs -and~~ the .Owenses andthe Adair non=test- case petitioner s 13 - On January 17, 2003, another panel of the Court of Appeals (D .W . Nelson , Hawkins, and Wardlaw, JJ .') issued Dixon V (amended March 18, 2003), reversing Dixon"III and remanding the test cases . The Court of Appeals held that the misconduct of the Government attorneys was a fraud on the Court, for which n o .showing of prejudice was required . Dixon V, at 1046 . The Court of Appeals directed us to extend the terms of the Thompson settlement to "Appellants and all other taxpayers properly before this Court" . Id . at 1047 . The Court of Appeals left to our discretion "the fashioning of such judgments which, to the extent possible and practicable, should'put'these taxpayers in the same position as provided for in the Thompson settlement ." Id . n .ll'. The Court of Appeals took no action on our denial of .Izen's discovery requests . On March 14, 2003, another panel of the Court of Appeals for the Ninth Circuit (Canby, O'Scannlain, and T .G . Nelson, JJ .) remanded the nontest cases that had been appealed and,held in abeyance, directing further proceedings consistent with Dixon V . . By January 23, 2003, Minns had began to pursue disciplinary actions against McWade and Sims . Following what he interpreted as a suggestion or order by a member of the panel that heard oral argument on the appeal that resulted in Dixon V, Minns filed complaints that resulted in suspensions from practice of McWade and Sims by the Oregon and Arkansas,-Bars, respectively , and .the IRS Office of Professional Responsibility . On February -20, _2 0 04 ,, the Tax .Court , ,acting ion the , orders t o show cause 'and',the-recommendations . of the-Committee o n Admissions,,Ethics, and,Discipline,¢suspendedMcWade an d from, practice before-the, Court6 for 2, years .:' In February 200 .4 ., the ;-Arkansas State , Bar suspended Sims' s „license ,to- .practi ce . law for I year, . and''in August,2004,, :the .,Oregon,,State-,Bar .suspende d McWade's license to practice for-.2 years . On June ,9, 2004, the Director of the IRS Of fices :_,of ;Professional Responsibilit y suspended McWade and Sims from practice,before the IRS for an y indefinite :' period . , II . DixonV=Remand Proceeding On April 23, 2003, the Tax Court received the primar y mandate ,of the, Count of :,-Appeals ,I (the,-primary mandate ) .vacating Dixon III :," The primary'mandate required that ;ywe,determine the_~; terms of the Thompson ,settlement'and enter . decisions that, "t o 6011. July 14 , 2003 the Tax . Court had accepted .DeCastro' s' resignation trom the 'l-ax court bar . 7On Oct . 9, 2007, and on Jan . l5, 2008, respectivelyMcWade_ submittedt;a .petition .for .reinstatement and .a supplement ; thereto . After a hearing and consideration of an additional supplement submitted ,by'McWade, -the Court ;,.} in .an order' dated June ,, 27, 2008 , denied McWade's petition for reinstatement . "On-June '2, . 2003, the Court received the supplementa l mandate of the Dixon V panel, directing the Court to act on " petitioners', appellate fee requests . 15 - the extent possible and practicable", would put Kersting project petitioners in the same position as provided for in the Thompson settlement . On April 30, 2003, respondent filed a motion for a status conference . On May 1, 2003, the Court ordered the parties t o file status reports by May 30 . By or around May 30, status reports-were received from all participating counsel, including Minns . As described in the background statement of Dixon IX, counsel for all represented petitioners informally agreed that Porter & Hedges would, in effect, serve as lead counsel in the Dixon V remand proceeding . Through Binder, Porter & Hedges played the lead role, in presenting the petitioners' case in-the Dixon V remand proceeding . A . Houston Status Conferenc e On July 7, 2003, we scheduled a status conference, to be held in Houston on August-18, 2003 . On July 11, 2003, we ordered the . parties-to file-reports of their suggestions for the agenda of that status conference . By August 12, 2003, counsel for the petitioners whose cases had been consolidated for the Dixon V remand proceeding filed their reports . O'Donnell asserted in his report that Kersting project petitioners whose cases had been closed by stipulated decisions (the closed cases ) I should also "be entitled to, the benefit of the Thompso n - 16, - The Houston status conference lasted 2 days . Minns appeared-,,. and spoke on the f .irst,,day of the conference ,Williams alon e attended the second day(cid:127)but had .no occasion to speak . At the Houston(cid:127)status(cid:127)conference'it became,obvious-that th e parties were, in substantial= disagreement about the terms, of the-. Petitioners contended that the Thompsons, . received, tax benefit's from ,the, Thompson settlement . that wen t beyond the stated terms -ofthe, settlement, and decision documents .- Petitioners .also . asserted .that= those benefits extended taxable :: years of .the Thompsons' other ; than 19,79, 1980, ._ ..,and 1981, n-the ' taxable years at ;issue ;'in-the Thompson(cid:127) testacases . .9Several Kersting project petitioners whose cases,had been closed by stipulated decisions subsequently . filed or attempted . to . file motions for leave to file motions to vacate those decisions . In Hartman~iv . Commissioner , T ..C . Memo .. 2008-124 ;(Hartman .,:I) , reconsidering and superseding Lewis v . Commissioner , T .C . Memo . . 2005 7205,, weheld that the Thompson settlement sanction will^be , imposed against respondent in the docketed cases of all Kersting project'petitioners in which stipulated decisions,, were, entered on .,, or after ;June 10, 1985, .the commencement date-of the Court's, Honolulu trial session at which the Court and representatives 'of, the parties agreed to use the test-case procedure .. In, Hartman v .- Commissioner, .' T .C ., Memo . 2009-12 .4 - (Hartman II) , we, ; granted (cid:127)in part motions for reconsideration insofar as they concern the mechanics of implementing the sanctions against respondent in th e closed cases . - 17 - B . Los Angeles Status Conference and Thompson Tax Records for Years Other Than 1979, 1980, and 198 1 Because the parties could not agree on the terms and benefits of the Thompson settlement, further evidentiary proceedings were required ; we scheduled another status conferenc e for September 5, 2003, in Los Angeles . At this conference Jones complained that respondent had failed to provide transcripts of the Thompsons' tax records . Jones argued that these records were needed to determine whether the terms and benefits of the Thompson settlement extended beyond the years 1979, 1980, and 1981 . C . Las Vegas Special Session On April 13', 2004, we issued a scheduling order, setting the first session of the evidentiary hearing for September 20, 2004, in Las Vegas . The order stated that the hearing was to be held for the sole purpose of determining the terms of the Thompson settlement . The order further stated'that neither appellate fees nor the closed cases would be addressed during the evidentiary hearing . On September 10, 2004,'respondent's counsel, Henry E . O'Neill (O'Neill), informed petitioners that, on September 9, 2004, he had found the Thompsons' tax records and returns for the years 1983 through 1989 . Petitioners cited O'Neill's delay in providing these returns as further evidence of respondent's 18 - efforts to prevent : disclosure of,th e former . counsel ' s mis conduct . On September 20 through 22, scheduled hearing. session in La s day of the hearing . Soon after . the session began, Minns requested the"Court' s assured the Court that Williams woul d Federa l remainder of the session . We granted Minns' request . During the .afternoon of the first day of the hearin g 'session ; Minns requested the Court's permission to allow To m Snell (Snell), an accountant, to take Minns' seat at petitioners .', i _ x ' is 4 n counsel's table ., Minns explained that Snell , whose expertise had been sought to establish evidence . supporting petitioners' theories, would assis t matters related to accounting . The Court allowed Snell t Minns' seat . at the counsel table, and Minns sat with the audience . Williams attended the second and third days of the Las Vega s hearing session in place of Minns . Williams sat with the . audience ._and did not question any witnesses or otherwise appear. to participate actively in the proceeding . D . Los Angeles Special Sessio n 19 - Many factual issues remained unresolved after the Las Vegas hearing session . On October 6, 2004, . the Court issued a scheduling order continuing the hearing to November 22, 2004, in Los Angeles . Williams rather than Minns attended the Los Angeles hearing session . Williams' only active participation in the session was signing a stipulation of facts on behalf of the Minns Law Office . Otherwise, she sat with the audience during the hearing . According to Williams' timesheets, she spent more than 8 hours at the hearing and conferring with counsel on November 2 2 F and more than 10 hours at the hearing and meeting with a client on November 23 . The hearing session followed by ,a brief meeting in chambers lasted no more than 4 hours on November 22 . E . Washington, D .C ., Special Session and Petitioners' Opening Brie f On February 3, 2005, petitioners through Binder filed a motion for a third and final evidentiary hearing session . February 4, 2005, we issued an order setting the final hearing session to begin March 29, 2005, in Washington, D .C . . On March 29, 2005, in-Washington, D .C ., we began th e final 2-day session of the Dixon V-evidenti.ary-hearing . Williams attended in Minns' place and did not actively participate . , On the second day of the Washington, D .C ., session, the - 20 - Kersting project petitioners .~agreed to .submi t pintopenin g brief~° for .which Binder would :do most of thea .work Counsel _ for respondent and-the-Kersting project petitioners further informed .- the Court ; that they. agreed that attorney' s .fees incurred ,durin g the Dixon V remand proceeding should be awarded under sectio n 6673 (a) (2) . rather-than section 7430 . F . - ; Our Determination, of Scope ofeThompson Settlement . and Awards of Appellate Fee s e On July 14 2005 Binder filed a 189 =page joint openin g brief'-signed .by all petitioners' counsel who had participated(cid:127),in . the Dixon V remand, proceeding . Among the myriad issues addressed . . in'this, brief were the treatment of the section 6651'(a) (1 ) addition to tax\as aterm of the Thompson settlement and th e cutoff . date of deficiency interest accruals against Kersting project petitioners, as well as petitioners' primary argumen t that the overall percentage reduction in deficiencies .-provided .by the Thompson settlement amounted to approximately .80,percent f On July ;l4 2005 Sticht filed a nine .-page supplemental < brief , arguing efor an-x-87 -percent reduction,,-in deficiencies and - ant , earlier, cutoff date,Pfor interest accruals on, .the deficiencies . On Julyw15 2005 .,=Jones ,, O' Donnell, and Izen filed = a,21-page d joint supplementalbrief . arguing primarily . that the Court shoul d :impose as °a sanction,a 100-percent reduction in ' the deficiencies on respondent . Minns did not file a supplemental brief . - 21 - On May 2, 2006, we issued our opinion in Dixon VI , explaining our determination of the terms and benefits of the Thompson settlement, including a 63 .37-percent reduction . of the Thompson deficiencies . In Dixon VII .and Young v . Commissioner , T .C . Memo . 2006-189,'issued May 10 and September 6, 2006, . respectively, we awarded appellate fees and expenses under section 7430 for services through April 30, 2003, the date respondent filed the motion for a status conference . G . Minns' Motion for-Reconsideratio n On June'6, 2006, Minns, on behalf of the Hongsermeiers, filed a motion for reconsideration of our opinion in Dixon VI . Minns' motion presented tworarguments ._ First, Minns argued that the Court-should have cut off interest on .petitioners' deficiencies commencing in 1986 with the inception of'the fraud and not 1992, in accordance with respondent's concession, and should have handled the section 6651(a) late-filing addition differently . Second, Minns argued that the Court's opinion in Dixon VI did not adequately address later misconduct of respondent' s ; attorneys . On September 7, 2006, we issued Dixon VIII, responding to the Hongsermeiers' motion for reconsideration filed by Minns . With regard to Minns' first argument relating to the cutoff of interest and treatment of section 6651 additions to tax, we cited Estate of Quick v . Commissioner , 110 T .C . 440, 441 (1998), and noted that . we had fully .addressed these issues in,Dixon .VI,l,° and we declined to do anything further ; Dixon VIII n ..3 ;,see also , 22 - Stoody v . Commissioner , 67 T4-C .-,-643,,,-644 (1977)„ ; ' Lowry Commissioner., . ,.T . C . Memo . 2004-10 ; . Estate 'of :Scanlan-(cid:127) :v Commissioner, T .C .'.Memo .- 1,996-414 . We responded . to 'Minns' second argument _ that x.we shad, notro , determined. the "full, extent .of . ;,the wrong done by the government ; trial lawyers" .by-notingthat _!Izen,,~Jones, :,and .O.'Donnell ha d -further inquiries would violate< the '\law o f ; the' case" and- "rule !.of . mandate" ,established by the Court , :o f Appeals for the N.inth ;.Circuit in Dixon V . III . The Minns Law Office'" Dixon V Remand-Proceeding Fee an d Expense Requests Respondent, in a a - r had suggested that petitioners ' counsel submit their fe e applications for services in the . Dixon V remand proceeding respondent for review befor e filing them with the Court . Respondent indicated that "the possibility exists tha t 10Minns' arguments had been previously argued in Binder' s July 14 .,- 2005 ; opening brief (arguing, in : section IV, subsections D and 'E that petitioners were entitled to interest and penalt y unin in,Jones',Jul y l the5Co2005, supplemental brie f (arguing e "depth of respondent's counsel's fraud") . urt had not determined' th agreement could be reached at least with respect to some portion, and conceivably all, of the fees requested in a particular . 23 - application" . Sticht and Irvine responded to this invitation timely by providing contemporaneously created time' sheets and expense records to respondent . In October 2005 Sticht began to provide respondent with timesheets and invoices reflecting work performed and amounts paid by his clients . In June 2006 Irvine began to forward time sheets and other documentation to respondent for review . Sticht and-Irvine were thereby able to reach agreement with respondent on the reasonable amounts of their fees and expenses well before we set the time for filing all petitioners' . fee and expense requests ." . On May 4, 2007, we ordered all participating petitioners to submit requests for attorney's fees and expenses incurred in the Dixon V remand proceeding by June 8, 2007 . On May 29, 2007, Jones filed a motion, which we granted, to extend the time to file all such requests to July 8, 2007 . Minns did not initiate contact with respondent's counse l on the subject of a negotiated fee and expense award-until afte r our order of May 4, 2007 . Because Minns had not prepare d "With respect to Sticht' s fees and expenses , see supra note 2 ; with respect to Irvine' s fees and expenses , see Dixon IX . - 24 - contemporaneous-timesheets .or sent client invoices_ :but,was , (cid:127) attempting to, prepare ; timesheets on the basis . of, Porter,&Hedge s records, respondent told Minns that it would not be possible to . r before the deadline for filing fee7applications and,that, Minns-° should file his ,fee application with the,'Court . On-June 12, 2007,,Williams filed petitioners'-request , for an award of attorney';s "fees on behalf of,-the Hongsermeiers .,12 Thee request covered fees from January 20, 2003, through-May . 23, 2007, and,requested-a total of $1,006,629 .85 in-,fees and $21,363 57 .irix"expenses :Included with the request . was an 84-page, form ~,of .bill dated ..June 8, 2007, addressed,to th e Hongsermeiers . On July 5,, 2007, respondent filed a response t, ,petitiooner s request ; °for an ., award,, of attorney's fees and,expenses, noting numerous,errors and-inconsistencies in petitioners'' .request~4 of June,12, 2007 .!- ;For example, according to petitioners, fee and expense application . entry for October 31, 2005(cid:127), Minn s and Williams each worked 30 hours that day . Several other ° entries ;conflicted-with"entries in Binder's and Irvine' timesheets,=from which Minns and .Williams derived .much- the information-used to, reconstruct -their timesheets ., . , 12Williams was admitted to the Texas bar in 2001 . Sticht's - associate'BorisOrlov was admitted to the California bar in 2002 ; Sticht : .chargedan& respondent agreed to $1,75, per hour . as the. rate for Orlov's_services in the . Dixon V remand proceeding - 25 - Moreover, according' to,-respondent,-,many of the entries i n petitioners' fee and expense request placed Minns or Williams at events for which they were not present . With the response respondent submitted Exhibits A through J listing respondent's- specific objections grouped by category . On September 17, 2007, Williams filed petitioners' reply to respondent's response to petitioners' original fee and expense request as well as an amended/ fee and expense request (unless otherwise specified, all references to a fee request are to th e amended fee and'expense request) . In their amended request,' which included another form of bill (85 pages) to the Hongsermeiers dated August 29, 2007, petitioners reduced their requested fee award to $967,362 .21 but slightly increased the requested expense award to $21,525 .99 . In so doing, petitioners corrected some of the inaccuracies described in respondent's response . For example, the entries claiming'Minns and Williams had each worked 30 hours on October 31, 2005, were each changed to 30 minutes . Petitioners also conceded that they should not receive any award for fees awarded in Dixon VII, but they did not concede that they should not receive an award for appellate fees that they had not presented for our . consideration in Dixon VII . In the original request for fees and expenses of June 12, . 2007, and the amended request of September 17, 2007 ., .Williams asserted that the Hongsermeiers are or remain liable for the - 26 - requested fees under,an executed contract with-the ,MinnsLaw , The original and amended request included requests fo r "such,, ' fees for fees ' as they have-shown and will-show-'to , thi s * * interest on such,fees and . expenses ,beginning January 17, 2003, the day the Ninth Circuit Court of Appeal s Dixon VI was filed" . The, ;Hongsermeier test-cas e petitioners have never filed a,supplemental request-for ;"fees ;,, for . Petitioners °reply%repeated the assertion that th e Hongsermeiers "are .-:personally liable for massive .= legal fees ",,; . but also statedthatx"they are currently joined by thirty- nine', ' piggybackers, who helped finance the case . post {Dixo n ,V]"' On September 25, .2007, we ordered petitioners ..,to ; supplement their amended fee request by filing a copy Fof . . the fee agreements between the . Hongsermeiers . and Minns,,with respect to the Dixon V remand ; .proceeding . On October 1,x,2007, ; petitioners complied in part with . that order by filing a ; form of-fee agreement with =petitioner Richardd Hongsermeier ,(Fiorella Hongs .ermeier ..is not included as a party and ' th e agreement(cid:127) ;is'signed and .dated March 3, 2003;, by Richar d Hongsermeier but not. by Minns) . The agreement provides for-the , payment , of, an,up-front fee . of $3,500 plus a monthly , fee . pf $100 until .the,case has been-concluded . The agreementa,,contemplates .a" similar,arrangement,with at least 30 non-test-case petitioners .-a, Although Williams asserts in the September 17 reply that "thirty- nine piggybackers" have signed up, as yet there is no evidence in 27 - the record of the number and identity of non-test-cas e petitioners who may have joined in this arrangement or of amounts they have actually paid Minns for work done in the Dixon V remand proceeding . Other salient terms of the Hongsermeier fee agreemen t include : Accounting . There will be no charges for work already done . Fees . * * * Client is responsible for all legal fees on remand . *'* * Client will be credited for * * * payments (by other persons who sign up ] but remains liable for payment of the entire legal fee . Rates . The rate for Michael Minns is $500 .00 per hour . The rate for Enid Williams is $250 .00 . The rate for paralegals is $10 .0 .00 per hour . The rate for secretaries is $75 .00 per hour . Covenant . The client agrees and covenants that : 2 . Understands that this agreement is entered into because the Firm expects to make a profit on-this leg of the case . 3 . The Client understands that the Firm may earn substantially more than its normal hourly rate under this agreement or substantially less . will pursue it [disciplinary proceeding against IRS attorneys]'for the public good . . . The Firm . On October 9, 2007, respondent filed-a response t petitioners .' amended fee and expense request ; on October 12, 2007, respondent filed a supplement to the October 9,p200 7 28 - respons e Respondent observed in the October 12, 2007, supplemen t that in 'all likelihood the amounts in the amended request for , fees and expenses substantially exceeded what Minns', clients had actually-paid or were obligated to pay . Respondent , argued . that, . these excess amounts had, therefore not been "incurred" within the meaning of section 6673(a)(2)(B) . This is an argument that,we have rejected in Dixon IX with respect to the Porter & Hedges fe e arrangement to represent the Dixons and the,'DuFresnes'in th e Dixon V,remand"proceeding without cost . to them . Our remaining tasks are to examine respbndent's-general, objections . to the billing rates claimed by petitioners for, the 'services of,Minns and his staff, respondent's ,, specific, objection s ,entries for„time allegedly spent (and related expenses) a s unrelated to the,Dixon V remand proceeding, and the reliabilit y of documents submitted with petitioners' fee request ; we conclude -by addressing,4"6verlawyering" .with respect to the time..'remaining after we have addressed respondent's general and specifi c objections . I. . ' Application' of Section 6673',(a) (2) (B ) Discussio n The part .ies,agree that attorney 's fees and expenses shoul d be awarded under section 6673(a)(2)(B) with respect-to a 1 petitioners who, participated in the Dixon V remand proceeding . Section 6673(a)(2) provides : 29 - (2) Counsel's liability for excessive costs ..-- Whenever it appears to the Tax Court that any attorney or other person admitted to practice before the Tax Court has multiplied the proceedings in any case unreasonably and vexatiously, the Tax Court may require-- (A) that such attorney or other person pay personally the excess costs, expenses, and attorneys' fees reasonably incurred because of such conduct, o r (B) if such attorney is appearing on behalf of the Commissioner of Internal Revenue, that the United States pay such excess costs, expenses, and attorneys' fees in the same manner as such an award by a district court . - A . General Rule s During the Kersting tax shelter litigation this Court has ,awarded attorney's fees and expenses under section 6673(a)(2)(B) incurred in proceedings .in this Court--Dixon IV, Dixon IX, and Gridley II--and under section 7430 for fees and expenses incurred in the Dixon V appellate proceeding--Dixon VII and Young V . Commissioner , T .C . . Memo . 2006-189 . In Dixon IV, Dixon VII, Young , and Dixon IX, we explained the distinction between fee-shifting prevailing party statutes, such as section 7430, which are based on substantive policy-that prevailing private parties .should be able to recover fees and expenses from the Government in certain types of cases, and-fee sanction statutes, such as section 6673(a)(2), which emphasize punishment and deterrence of litigation misconduct by both - 30 - private-and Government attorneys . See Chambers,v . NASCO, Inc . 501 U .S . 32, 52 (1991) ; Bus . Guides, Inc . v . Chromatic Commcns . Enters ., Inc .,, 498,.U-.,S . 533 (1991) ; Cooter & _Gel1Y,v . Hartmar x Corp ., 496 .;U .S . 384,,,409 (1990) . Fee sanction statutes, such a s section 6673(a) generally are designed to punish-and deter , litigation misconduct of the parties, and section 6673(a)(2)(B) in particularis, designed to punish and'deter the misconducto f the Commissioner's counsel . Section 6673(a)(2) also requires that the 'fees and expenses awarded be reasonably related to th e conduct,giving,,rise to the sanction . . Both section 7430 and section 6673(a)(2) limit the award to .reasonable fees and expenses . However, fee-shifting statutes, such as section 7430, impose additional limitations that do,not apply under .the,,fee_sanction statutes, placing an hourly rate ca p on fees, imposing , a net -worth'limitation on taxpaye rs requesting . reimbursement, ands allowing awards to, be made only, „in favor .,of {' prevailing private parties . B . Meaning of "Incurred" Under Section 6673,(a)(2)(B),,,AII addressing hourly rates and respondent's objections to time spent ., we summarily dispose of, respondent's argument that we,should : reduce the award because some .portion of the,fees ;,and,, , 'expenses requested has not been "incurred" within the meaning of', section, 6673 (a) . (2) ,(B) . Respondent argues . that the fees and expenses .<requested have not been "incurred" to the-extent the y - 31 - exceed amounts paid or payable by Minns' clients for legal services in the Dixon V remand proceeding . This is the same argument respondent made in Dixon IX, that the fees and expenses claimed by Irvine on behalf of his firm for services in the Dixon V remand proceeding had not been "incurred " under section 6673(a)(2)(B) because Irvine on behalf of his firm had agreed with the Dixons and the DuFresnes to represent them in the Dixon V remand proceeding at no cost except for such fees and expenses as might be allowed by the-Court . In Dixon IX we rejected respondent's argument, relying on both section 6673(a)(2)(B) and our inherent power, to hold that respondent had incurred the obligation to pay those fees and expenses as a ,result of the misconduct of his attorneys . - By a parity of reasoning, we reject respondent's similar argument in the case at hand . If and to the extent it should turn out that the reasonable fees and expenses respondent is otherwise obliged to pay exceed the total amounts paid and payable by Minns' clients, we hold that respondent will be obliged to pay Minns the excess .1 3 13Our conclusion in this regard renders moot our doubt that the Hongsermeiers ( who filed net worth affidavits in connection with Minns' request for appellate legal fees under sec . 7430) have ever actually been obligated to pay the full amount of Minns' fees and expenses for services in the Dixon V remand proceeding . One o,f the orders we shall issue with this opinion will require Minns to set forth and substantiate the amounts paid by the Hongsermeier test-case petitioners and his other clients for services in the Dixon V remand proceeding , pursuant to fe e (continued. . .) We'now award fees under section 673(a) (2) . (B) for oservi.ces ; Minns and his staff performed in the Dixon V remand proceedin g To fix a fee award under section 6673 ( a) (2), (B) , we multiply .th e hours reasonably expended by the attorney s -reasonable i Pennsylvania v . Del . Valley Citizens' .Council ; 478- 6, 563 : (1986) ;, Hensley v . Eckerhart , 461U . .S . . .424, .433 c ,(1983) .,. . To calculate the fee award for Minns', services, .,we-=firs t determine reasonable hourly rates for Minns and his-~ staff, and, .,, then determine the number of hours Minns reasonably expende d ,the remand-,proceeding . II .Reasonable=Hourly Rate s ,The hourly rates petitioners claimed for Minns and,his staff, which respondent argues are excessive,, are as,follows , , 500 per hour~forwMinns' services, $250 perhour for Williams ' services,>~$'100 per hour for the paralegal's services, and,$ .75_pe r hour .' forxthesecretary.'s services . . For the,reasons discussed- below, we hold that,,, Minns' and Williams' claimed - rates ;,,are unreasonably # high sand should be reduced , and that . the ,paralegal',,s and the secretary ' s claimed rates should be allowed to stand W e reduce . Minns' rate to $350 per hour and Williams' . rate-',to $175 , 1 3, .continued), and expense ; agreements and otherwise Minns'y,responses'to thi s order will . enable us to determine the amounts of reimbursements .payable - to;, Minns ,.<nvarious clients and the excess .amount, if any, payable)to Minns . The reasonableness of an attorney's hourly rate is 33 - determined by the amount that attorneys of like skill in the area would typically be entitled to for similar work . Harper V_ Commissioner , 99 T .C : 533, 551' .(1992) . To determine a reasonable' hourly rate for services of Minns and his staff, we first'10-okWto the billing rates of his fellow, attorneys in the same matter, the Dixon V remand proceeding . A . Minns' and Williams' Hourly Rate s Like Minns, Attorneys Jones, Sticht, and'Izen represent private clients from around the United States in tax controversy work . Like Minns, each of these other attorneys is a sole practitioner who'served as the primary litigator on behalf of hi s clients, with assistance from an associate attorney and othe r support staff . Jones, Sticht, and Izen all charged $350 per hour and Sticht charged $175'per hour for the services of hi s associate Boris Orlov (Orlov) in the Dixon V remand proceeding . We use the hourly rates of these attorneys and associate-as guidelines in determining . the proper hourly rates for the services of Minns ..and Williams . Services provided by Binder and Irvine (the attorneys of Porter & Hedges) are not directly comparable-to those provided by Jones, Sticht, Izen, and Minns . By informal agreement of all counsel, Porter & Hedges, through Binder, played the lead role in representing all petitioners in the Dixon V remand proceeding . Porter & ,Hedges is a mid-sized law firm (approximately 100 34 - lawyers),,withe-greater resources and correspondinglygreater overhead costs . - ..Despite Binder's role as lead counsel,, his~, . average rate,,,$367 .50 per hour, was not much greater than they„ hourly,. rate ,ofa;,;Jones , :. Sticht, and Izen . . Irvine ' played . a restri.ctedgrole .as Binder's managing/,reviewing' .partner°°at Port.er ;',=we ;regard Irvine's higher average hourly rate : ; ., $425' pe r ' ,& -Hedges hour for far ;fewer hours, as appropriate .14 Although office location can be a factor i determining' a reasonable hourly .~ rate , it does not outweigh , the similarities i n the nationwide,services provided by Jones ; Sticht,_Izen, and ,ti, 'Minns . While the offices of Porter & .Hedges, Minns,,and Izen'are all in or ; nearHouston,_Texas, the offices of,,Jones and-,,Sticht 1 are in .,Las -Vegas ,and . Los ,Angeles, respectively . ; °.. If :we-,were ; to .give office-location . some weight, Minns' services would, :be mor e comparable to .the services of Binder and Irvine than, ;,to,,those,of Sticht, and- Jones . , .However, Izen' s office is, . also in .. the Houston , area, andMiftns': :-services during the Dixon V - remand ; proceeding were,more. like', Izen'(cid:127)s services than the servicesa-,of Binder . and ; Irvine . 'The similarities in the practices of ..Jones,= . .Sticht, . Izen ;,and,,Minns, the similar roles of each in the,Dixon,V remand proceeding'; and the consistency of the hourly rates . of=Jones ' Sticht, and',Izen-outweigh the significance of any differences in ° their7office'locations . Office location is not a factor that, 14We note that respondent did not object to . Irvine's and- Binder's, .-hourly-rate s' . influences our holdings of reasonable hourly rates for Minns and 35 - Williams . Minns' allowable billing rate should approximate or equal the rate charged by Jones, Sticht, and-Izen : Williams' hourly rate should be'irn the same range as the rate Sticht charged for Orlov's services' The hourly rate petitioners request-for Minns' services, $500 per hour', is substantially greater than the $350 hourly rate Jones, Sticht, and .Izen charged for their services, and the rate petitioners request for Williams' services, $250 pe r hour, is substantially greater than the $175'hourly rate Sticht charged for Orlov's services . The rates petitioners request for Minns' and Williams' services in the Dixon V remand proceeding exceed the rates that "'attorneys of like skill in the area would typically be entitled for a given type of work'" ., See Harper v . Commissioner , supra at 551 (quoting City of Detroit v . Grinnell Corp . , 495 F .2d 448, 471 (2d Cir . 1974)) . We conclude that the reasonable hourly rates for Minns's and Williams' services are $350 and $175 per hour, respectively . B . Paralegal's and Secretary's Hourly Rate s Petitioners request $100 per hour for paralegal services and $75 per hour for secretarial services . Because the rate charged for Minns' paralegal's services ($100 per hour) is lower tha n both the rates of Jones' paralegal ($120 per hour) and Porter & Hedges' paralegals ($130 per hour), we conclude that $100 per hour should be allowed to stand as a reasonable'rate,,for-Minns' (cid:127) 36 - 1Minns', legal secretary provided some services .similar,to, thoser,performed by the paralegal, such as .drafting . .some .legal documents .,It,would not be unreasonable to charge(cid:127)$75 .an hour; for services,bf . ,the ,secretary for which the paralegal - charg e would,be,$100„an hour. We conclude that $75 per hour i s reasonable rate for Minns' secretary for the performance .,of paralegal,type services . The schedule immediately :,foll.owing,_ reflects petitioners' amended fee request before and . after applying the reduced rates for Minns and Williams :. Minns .William s Paralega l , .Secretar y Hours 1,533 .29 738 .27 124 .18 49 .98 " Total 2,445 .72 Befo r e Rate $500 250 100 75 - Tota l $766,645 .0 0 184,567 .5 0 12,418 .0 0 3,748 .5 0 967,379 .00 Rate $350 175 100 75, After , P6 . F" W Tota l $536,651 .510 . 129,197 .2 5 12,418 .0 0 3,748 .5 0 682,015 .2 5 The above reductions in Minns' and Williams' hourly rates reduc e petitioners overall request by $285,363 .75,($967,379 .00 minu s $682,,015 .25 equals $285 ,363 .75) . III . . Hours Reasonably Expende d To determine the number of hours Minns and his staff- reasonably expended on the Dixon V remand proceeding, we .must first eliminate-entries that are clearly unreasonable . Respondent argues that we should reduce petitioners' requested 'award'because certain categories of fee entries are unrelated t o the Dixon V remand proceeding or are otherwise excessive or duplicative and because Minns' time entries and billing records - 37 - are unreliable .- To be compensable, hours expended in litigation must be reasonably related to the Dixon V remand proceeding and Must not be excessive or duplicative of other counsel's efforts . See Hensley v . Eckerhart , 461 U .S . at 434 (courts need'not award fees for services for which attorneys should not bill their clients) ; Saizan v . Delta Concrete Prods . Co . , 448 F .3d 795, 800 (5th Cir . 2006) (duplicative work efforts are an abuse of billing judgment) ; LaPrade v . Kidder Peabody & Co . , 146 F .3d 899,906 (D .C . Cir . 1998) ; Napier v . Thirty or More Unidentified Fed . Agents , 855 F .2d 1080, 1094 (3d Cir . 1988) ; see. also Amlong & Amlong, P .A . v . Denny's, .Inc . , 457 F .3d 1180, 1190 (11th Cir . 2006) ; Gillespie v . Commissioner , T .C . Memo . 2007-202, affd .°29 2 Fed . Appx . 517 (7th Cir . 2008) ; Kenny A . v . Perdue , 4 .54 F . Supp . 2d 1260, 1286 (N .D . Ga . 2006) (referencing the analogous language of 28 U .S .C . sec . 1927), affd . 532 F .3d 1209 (11th Cir . 2008) . A . Preliminary Comment s Before we address respondent's arguments that certain fee entries are unrelated to the Dixon V remand proceeding or otherwise excessive or duplicative, and then the ; reliability of Minns' time records, we make some general comments about excessive and duplicative efforts in the Dixon V remand proceeding.. 38 - On„reflection,, it appears to us that we permitted, ..the :~Dixon : V remand proceeding to become "over-lawyered" .15 In,.the absence of any objection or contrary suggestion by respondent, .we consolidated'27 Kersting project cases and allowed test- case- petitioners represented by Izen, Minns, and,Irvine andx .Binder,,and non-test- case . petitioners represented by Izen, Sticht, and Jones, and .O'Donnell ..tto participate in the Dixon V remand :proceeding, -the same_,27, cases we had consolidated for the purpose, of the earlier DuFresne ,remand in response to the DuFresne panel's . directive : regarding efforts to intervene by affected .parties . r In retrospect, the interests of economy and efficiency migh t well,havefbeen .better served if we had issued an order, .to show, cause why : participation in the Dixon V remand proceeding should ; . not ; be" limited ;, to test-case petitioners as they had been, , represented by three sets of attorneys in the Court-of Appeals .,i n 15The table below summarizes the hours and 1egal'' fees and expenses (by firm and in total) Kersting project petitioners have requested for attorney services in the Dixon V remand proceeding : Attorney Jones Minns' Izen Porter & Hedges' -Total < ' Hours 1,155 2,246 2,245 2,696 8,342 Fees $265,717 .45 967,362 .21 748,674 .14 980,337 .75 2 ,962,091 .55 Expenses $15,965, .97 21;,525 . 99 38,248 . 06 57,204 .83 132,944 .85 Tota l °$281,68.3 .4 2 988 , 888 .2 0 786 ,922 .2 0 1,037,542 .5 8 3,095,036 .40 , In addition, respondent agreed that non-test-case petitioners,_ represented by Sticht were entitled to recover fees and expenises on the order of 764 hours and $237,000 for services of Sticht,and Oriov in the Dixon V remand proceeding (Oct . 4, 2006,'order) . See supra note 2 . 39 - the appellate proceeding culminating in Dixon V .16 Or,-if we had been sufficiently prescient to foresee, and flexible enough to respond to, the leading role that Binder would play in the Dixon V remand proceeding, we might have had Porter & Hedges attorneys provide exclusive courtroom representation, .relegating other, counsel to consulting roles and a "watching-brief" . Cf ., e .g ., AARP v . EEOC , 873 F .2d 402 (D .C . Cir . 1989) . Allowing so many attorneys to participate actively in the Dixon V remand proceeding created an atmosphere in which some attorneys needlessly duplicated each other's efforts . We remind counsel that it is an exercise of poor billing judgment to charge clients for excessive or duplicative efforts . We need,not award fees where counsel have abused their billing judgment by attempting to charge for needless duplications of the efforts o f other attorneys in the case . We think that Minns has abused his billing judgment and that the fees and expenses petitioners claim are excessive and duplicative, even after giving effect to the bulk of respondent's specific objections . See infra Part III .D .1 7 "In the Dixon V appeal proceeding, briefing and oral" argument was limited by the Court of Appeals to the test-case petitioners, represented by Izen (Youngs and Owenses), Minns (Hongsermeiers), and Binder and Irvine'(Dixons and Dufresnes) . Non-test-case petitioners, represented bar Jones, Sticht, Izen, and O'Donnell, were relegated by the Court of Appeals to a watching brief . 17We note that, unlike Sticht's request, Minns' request shows no evidence that Minns actually prepared contemporeous timesheets or that he actually'billed his clients for work in th e . .) (continued . Reasonably Related to Dixon V Remand-Proceeding - 40 - I now turn to fee entries that respondent specificall y objects to, on the ground that they are not reasonably related t o the remand proceeding : (1) The appeal of Dixon' III ; '(2), collection,'bankruptcy,'and probate matters ; (3) 'disciplinary , .: proceedings against McWade and Sims ; (4) a Freedom of Information Act lawsuit ; (5) client relations ; (6) petitioners'' June76, ~ 2006,' motion for reconsideration ; (7) consultations with L .T . Bradt ; (8), 'investigative research in connection with former Commissione r of,'Internal Revenue'Joseph Nunan ; (9) a billing-'dispute between ' Minns and Jones ( 10)' the closed cases ; (11) ove rhead expenses ; ' (12) 'inadequately described entries ; and (13) others miscellaneous Fees Incurred During Appeal of Dixon II I Respondent objects to petitioners' original fee request for ' 160 .39"3 'hours of work, amounting to $41,773 in fees, as well as 17 ( . . . continued ) ... Dixon V remand-proceeding at any time before Williams,was(cid:127),abou t to tile Minns, tee requests witn the court . ~18Two of .,petitioners' amended request entries are-included in°this,figure and are not related to services provided,in connection with the appeal of Dixon III . The two entries are~fo r 1 .5 hours for both Minns and Williams on August 21, 2009, for : services provided in connection with the Hongsermeiers' appeal o f our-Dixon .-I V fees, ;-as well. as(cid:127)the .requested fees for work .done on the .appeal- , ,.of~Dixon .III, are requests for fees concerning appellate matters 'outside the scope of this case we deal with them together . ,and-.Dixon VIII opinions . Because these , requested $162 .42 in expenses, for services provided in connection with th e appeal of Dixon III, as follows : - 4 1 Minns Williams Paralegal Secretary Expenses 'Total Rate $350 175 100 75 -- Hours 82 .68 68 .17 7 .59 1 .95 160 .39 . Amoun t $28,938 .0 0 11,929 .7 5 759 .0 0 146 .2 5 162 .4 2 41,935 .4 2 Respondent argues that these fees are not related to the Dixon V remand proceeding and that we have already awarded petitioners attorney's fees and expenses for Dixon III appellate fees in our Dixon VII opinion . Although petitioners in their response to respondent's response . conceded that they should not receive an award for fees we already awarded in Dixon VII, petitioners did not adjust their requested award to reflect their concession . In their amended request, petitioners changed only two of the entries that respondent objects are'related to appellate fees .; namely the two October 31, 2005, entries relating to Minns' and Williams ' services that petitioners changed from 30 hours to 30 minutes each . Moreover, petitioners argue that the fees relating to th e appeal of Dixon III that they are now requesting in the pending request are related to the'cost of distributing to petitioner's the award we granted in Dixon VII . We agree with respondent . In Dixon VII we awarded fees for Minns' services related to the appeal of Dixon III . Petitioners' - 42 - fina l opportunity-to apply for fees related to the-:appeal o f DixonIlL'has passed . Therefore, we will reduce petitioners,' award by 101 .39 hours, amounting to $26,285 .50- -to reflect the30 hours to ..30-minutes .corrections--a s well as $162 . 42 in expenses : Rate $35 0 17 5 10 0 7 5 Minns Williams Paralegal,' Secretary Expenses Tota l Hours 53 .18 38 .67 7 .59 1 .95 101 .39 Amount " $18',-613 ;.'0 0 6, .767 .2 5 759 .0 0 146 .2 5 "' -162 .4 2 26,(447 .9 2 Collection Bankruptcy, and Probate Matter s Respondent also objects to petitioners' fee requests fo r ,services relating to petitioners' collection, bankruptcy, and probate. matters, citing 91 .76 hours of services, amounting to $25,544-75, attributed as follows : ,.Minns - ' Williams Paralegal Total Rat e $ 35 0 17 5 10 0 --- Hours 54 .96 35 .05 1 .75 91 .76 Amoun t $39,236 :00' , 6,133 .7 5 175 .0' 0 2.5 544 .7 5 Respondent'concedes that part of the 3 hours claimed b y petitioners for a March 24, 2003, entry for Minns's services i s .allowable . The entry at issue states that Minns reviewed a memorandum concerning Texas and Florida probate law, to whic h respondent . objects, and that Minns conferred-with Binde r concerning "remand issues" and the "Thompson settlement", which respondent concedes is allowable . The entry at issue does not allocate the time spent on each task, and respondent's objection to this,entry does not provide a method of allocation . Left to 43 - our own devices, we allocate 1 .5 hours to the review of the memorandum on Texas and Florida probate law, which we disallow, as indicated below . We also allocate 1 .5 hours to Minns' conference with Binder on "remand issues" and the "Thompson settlement", which we allow as compensable . Respondent asserts that petitioners' collection, bankruptcy, and probate matters are not related to the primary mandate of the Court of Appeals and the Dixon V remand proceeding . Petitioners urge us to award fees for these entries, claiming that, as a result of respondent's misconduct, various petitioners were financially harmed so as to require the various enumerated services . We agree with respondent . Petitioners' difficulties in collection, bankruptcy, and probate matters are not directly related to the Dixon V remand proceeding . These fees were not incurred at the trial level in the Tax Court but rather relate to petitioners' personal financial and legal problems . We therefor e reduce petitioners' requested award by 90 .26 hours of work, amounting to $25,019 .75 in fees related to collection, bankruptcy, and probate matters and to reflect the 1 .5 hours for Minns' conference with Binder on "remand issues" and th e "Thompson settlement", which respondent concedes is allowable : Minns Williams' Paralegal Total Rate $350 175 100 --- Hours 53 .46 35 .05 1 .75 90 .26 Amount $18,711 .0 0 6 ,133 .7 5 175 .0 0 25,019 .75 - 44 - Disciplinary Proceedings Against McWade and Sim s Respondent objects to our awarding fees for Minns' effort s in bringing disciplinary actions against McWade and Sims , amounting to 111 .28 hours of services and $30,396 . 75 in fees , attributed as follows : Rate Hours Minns Williams . ,Paralegal Total $350 175 100 --- 76 .85 0 .75 33 .68 111 .28 Amount $26,897' .5 0 131 .2 5 3,368 .0 0 30,396 .7 .5 In their, amended request, petitioners changed two of th e entries that respondent objects to as related to Minns ' disciplinary actions against McWade and Sims ; namely two entries ' dated-February 6, 2009, which reduced the hours,claimed for services by Minns from 12 hours to 2 hours and the hours claime d for services by Minns' paralegal from 12 hours to 4 ..45 . Respondent__argues that the attorney disciplinary proceeding s were not adequately related to the Dixon V remand proceeding . We agree with respondent . Disciplinary proceedings against McWade and Sims are not related to our determination of the terms of th e Thompson settlement . As Minns indicated in the Hongsermeier fe e agreement, this was pro bono activity for which he did not expec t i to be compensated . We therefore reduce petitioners' fee request by,93 .73 hours of services, amounting to $26,141 .75, to reflec t the, amended'February 6, 2009, entries reducing the hours' claimed - 4 5 for Minns' services from 12 hours to12 hours and the hours claimed for Minns' paralegal from 12 hours to 4 .45 hours : .Minns Williams Paralegal Total Rate $350 175 100 --- Hours 66 .85 0 .75 26 .13 93 .73 Amount $23,397 .5 0 131 :2 5 2,613 .0 0 26,141 .7 5 4 . Freedom of Information Act Lawsui t Petitioners' fee request also includes entries relating to a Freedom of Information Act lawsuit that Minns brought to obtai n IRS personnel records as part of an effort to determine the full extent of IRS misconduct in connection with the Thompson . settlement, amounting to 20 .88 hours of services and $5,263 i n fees, attributed as follows : Minns Williams Paralegal Total Rate $350 175 100 --- Hours 9 .55 10 .50 0 .83 20 .88 Amoun t $3,342 .5 0 1,837 .5 0 83 .0 0 5,263 ..0 0 While the personnel records that .Minns sought may have been of use in the disciplinary proceedings against McWade and Sims, the records have no bearing on-our reconstruction of the terms of the Thompson settlement, and are not sufficiently related-to the Dixoin(cid:127)V remand . proceeding . As a result, we reduce petitioners' request by 20 :88 hours of services, amounting to $5,263 . . 5 . Client Relation s Respondent objects to entries that respondent refers to as "client relations", which respondent asserts should be disallowed ." These entries total 641 .67 hours , amounting to $174,474 .50,-,,attributed as follows : 46 - Minns . Williams Paralegal Secretary _ Total' Rate $350 175 100 75 --- Hours 396 .38 159 .49 55 .72 30 .08 641 .67 Amount $138,73 31, . 0 0 27,910 .7 5 5,572 .0 0 2 ;256 .0 0 174,471 .7 5 In their amended request, petitioners removed 16 entries amounting to 36 .18 hours of Minns' services concerning items tha t respondent argues should be disallowed because they concern "client relations ." After removal of the 36 .18 hours th e remaining entries, total 605 .49 hours , amounting . to $161,809 .75 , attributed as follows : .~, Minns . Williams Paralegal Secretary Total' Rate $350 175 100 75 --- Hours 360 .20 159 .49 55 .72 30 .08 605 .49 Amount $12 .6,070 .0 0 27,910,75 5,572 .0- 0 .2,25 .6 .0 0 161,808 ..7 5 ,.Of .the remaining entries, most relate to generalized, clien t relations . Respondent's specific objections to,several entrie s .related-'to, ;client ., relations lead us to conclude that- some o f those-,entries should be (1) .completely disallowed--e :.g ., communications with pro se petitioners ; (2) .fully allowed--e .g .(, entries,-,relating to compensable calculations of clients' x, deficiencies' ; or (3) partially allowed--i .e ., entries that are only partially attributable to client relations . Nevertheless , we .(cid:127)are satisfied that in addressing the entries :relating t client relations . together we will arrive at an overall result - 47 - approximating the result=we would arrive at if we were to-address the remaining entries by breaking them down into specific subcategories : Therefore we will address the remaining entries as though they are all generalized client relations . Petitioners argue that the remaining entries of communications between counsel and various clients were directly related to the Dixon V remand proceeding . We agree with respondent's objection in part, but decline to disallow entries related to-client relations in their entirety . We may award fees for time spent on clientrelations'if that time is sufficiently related to the matter entitling petitioner s to a fee and expense award . Dixon VII ; Gridley II . Where petitioners do not'provide the subject matter for client communications , we may determine that a portion of those 1 communications is compensable . Dixon VII ; Gridley II . 'In Dixon VII and Young , in applying section 7430, and in Gridley II, in applying section 6673, we determined that if it was not clear that a fee or expense entry describing client communications was compensable , we would assume 50 percent of the time spent on the communication is compensable . In Dixon VII , we addressed the issue of-client relations when we evaluated whether to award fees related to Binder's and, Irvine's client conferences . Because we did not know the subject matter of these conferences , we assumed that 50 percent of the time spent in the conferences related to the appeal (the matter for,whichwe were then awarding fees ) and the remaining 5, - 48 - .matters (client . 0 percent related to, noncompensable, unrelated relations'and"hand holding") . We then awarded fees .for.,the, .remaining .portion of the time, which we allocated to .appeal,-s related matters . , Young-=v Commissioner , T .C . Memo . 2006-189, we continue d this approach in evaluating fee and expense entries that- did not , specify'the!,~subject matter of client communications . . allocated 50 percent of those communications to the appeals, grantingaanaward for that portion of the time, and .5 .0_percent to unrelated,,noncompensable matters . In,Gridley II, we applied the foregoing approach . establishe d in'Dixon VIl,and . Young in .evaluating client relations entries,for the .purposes~of,a request for fees and expenses under section 6673(a)-(2)(B) . Using this approach we reduced petitioners award by 50 percent ; of requested fees and expenses relating .to client communications where the subject matter of those communications . . was, unclear . Here,we,apply the approach used in Dixon VII,, Young , and Gridley II in evaluating client relations entries ., We therefore reduce„petitioners' award by 50 percent of the remaining client relations entries, or 302 .75 hours, amounting to $80,905 .25, attributable as follows : Minns Williams Paralegal Secretary Total Rate $350 175 100 75 --- 4 9 - Hours 180 .10 79 .75 27 .86 15 .04 302 .75 Amoun t $6 3 ,035 .0 0 13,956 .2 5 2,786 .0 0 1,128 . .0 0 80,905 .2 5 6 . Motion for Reconsideratio n Petitioners' original fee application included 39 .46 hours of services related to the Hongsermeier test-case petitioners' June 6, 2006, motion for reconsideration, for which petitioners claim $ .11,448 .75 in fees, attributable as follows : Minns Williams Paralegal Total Rate $350 175 100 -- Hours 28 .07 6 .47 4 .92 39 .46 Amoun t $9,824 .5 0 1,132 .2 5 492 .0 0 11,448 .7 5 In their amended request, petitioners removed a June 22, 2006, entry of 2-.92 hours of Minns' services for an item that respondent objects is related to a motion for reconsideration of this Court's Dixon VI opinion and therefore is not allowable in this proceeding . Respondent argues that because the June 6, 2006, motion for - reconsideration was frivolous and that any related fees were not reasonably incurred, we should disallow fees for services related to the motion for reconsideration . Because some of the arguments in the motion are being made by some test-case petitioners in the pending appeals of Dixon VI and VIII, we do not characteriz e these arguments as frivolous . However, we still agree that the fee request for work on the motion for reconsideration should be - 50 - disallowe< ':Petitioners' motion for reconsideration was nothing more than-'a rehash of arguments in the briefs previouslyfiled by Binder, Jones, and Sticht . We will reduce petitioners' .: award by 36 .54'-hours, amounting to $10,426 .75 in fees, to reflect the removal in petitioners' amended request of the June 22, 2006 , entry for 2 .92 hours of Minns' services : Minns Williams Paralegal Total Rate $350 175 100 --- Hours 25 .15 6 .47 4 .92 36 .54 Amount $8,802 .5 0 1,132 .2 5 492 .0 0 10,426 .7 5 Entries Related to L .T . Brad t Respondent objects to 35 hours of services, amounting t o $10,780,'that-are related to Minns' and Williams,' communications with,L .T . Bradt, attorney for Kersting . Those, hours are :,,, attributableeas,follows : Minns Williams Total Rate $350 175 --- Hours 26 .60 8 .40 35 .00 . .Amoun t $9,31 0 =1,47 0 10,78 0 Respondent claims that any communications with Bradt were not reasonably related to the proceeding on remand . We agree . Bradt represented Kersting during the original trial of the tes t cases, during the evidentiary hearing, and in Kersting's persona l deficiency case, assigned docket No . 7448-96 . See Kersting Commissioner , T .C . Memo . 1999-197 . Petitioners did not respond to respondent's objections or otherwise enlighten the Court as to the purpose or benefits to petitioners of the consultations with Bradt, and we'disallow the m - 51 - in their entirety . 8 . Entries Related to Joseph Nunan Respondent objects to 4 hours of entries, amounting to $737 .50, for research related to former Commissioner of Internal Revenue Joseph Nunan (Nunan) . Those hours are attributable as follows : Minns Paralegal Secretary Total Rate $350 100 75 --- Hours ' 1 .50 1 .00 1 .50 4 .00 Amoun t $525.0 0 100 .0 0 112 .5 0 737 .5 0 We agree with respondent . The career of Nunan, who resigned ,in disgrace from the Bureau,-of Internal Revenue more than .40 years before the issuance of Dixon II, bears no relationship to .the Dixon V remand proceeding . Accordingly,' we reduce petitioners' award by 4 hours of services, amounting to'$737 .50 . 9 . . Chapin Billing Disput e Respondent objects to 4 .38 hours .of entries related to a' billing dispute between Minns and Jones . Those hours are attributable as follows : Minns Williams Total Rate $350 175 --- Hours 1 .98 2 .40 4 .38 Amount- - $69.3 42 0 1,11 3 Both Minns and Jones had filed entries of appearance for petitioners Bryce H . and Reba E . Chapin (the Chapins) . On October 30, 1992, Jones and O'Donnell filed a joint entry of 52 - appearance for the Chapins . On May 17, 1994, O'Donnell :f:iled :a, notice with the Court, designating Jones as counsel toreceive service . On May 31, 1994, O'Donnell filed a motion towithdraw from representation of the Chapins, which we granted on_June 2, 199.4, . .:Subsequently, on July 22, 2003, Minns and .Williams,filed an= entry of appearance on behalf of the Chapins . Jones never filed a motion to, .-Withdraw as counsel . However, on May 17, 2007, it was'Minns who signed the Chapins' stipulated decision documents . As of the date of this opinion, Jones remains the attorney o f record :.for the Chapins . The billing dispute between Minns and Jones is not-something for which Minns could bill petitioners . Under Hensley v . Eckerhart , 461 U .S . at 438, it would be inappropriate to award fees,for :work related to a billing dispute . Even thoughthe clients might have been willing to pay for such-services if they really wanted .to replace their prior counsel, we do not ; believe that respondent should be saddled with these fees . Accordingly, we reduce petitioners' award by 4 .38 hours of services, amounting to $1,113 in fees . 10 . Closed Case s Respondent also objects to 7 .14 hours of entries related to motions to vacate stipulated decisions in cases settled before and after the trial in Dixon II . Those hours are attributable as follows : -j5 . Minns Williams Paralegal Total Rate $350' 175 100 --- Hours 2 .34 . 3 .67 1 .13 7 .14 Amoun t $819 .00 ' 642 .2 5 113 .0 0 1,574 .2 5 We'agree with respondent as'to'5 .64 hours responden t objected to on the grounds that those entries were related t o closed cases which are the 'subject of our 'later opinions i n Hartman I and II and are not . reasonably related to the Dixon V remand proceeding . Early on in the Dixon V remand proceeding we made it clear that the subject of reopening the closed case s would not be addressed in-the Dixon"V remand proceedin g ." Accordingly in regard to petitioners' fee request-,i n relation to .closed'cases, we will reduce'petitioners= award by 5 .64 hours" amounting to $1,180 .501 in,,'fees which are attributabl e as follows : Minns Williams Paralegal Total Rate $350 175 100 --- Hours 1 .59 . 2 .92 .1 .13 5 .64 Amount $556,.5 0 511.0 0 113 .0 0 1,180 .5 0 The remaining 1 .5 hours relate to entries . on February 14, 2005 ., which state that Minns'and Williams each spent .75 hour to "review motion to compel settlement as supplement to . motion for leave .to file motion to vacate decision ." . . We .interpret thes e entries. to relate to ..a."Motion for Summary Judgment of a 10 0 percent Discount as,a Sanction" which was filed by Attorneys - 54 - Jones and O'Donnell on January 31, 2005 . However, in Gridley I I we disallowed any award for services in preparing that motion . See Gridley„-II, Part II .J . Likewise, in this case we 1, disallow fees iricurredmin reviewing that motion . Accordingly, we furthe r reduce petitioners' award by 1 .5 hours amounting to $393 .75 , attributable as follows : Minns Williams Total Rate $350 175 --- Hours .75 .75 1 .50 Amount $262 .5 0 131 :2 5 393 .7 5 11 . Overhead Expense s Respondent has identified several fee entries related to overhead expenses . These entries total 9 .59 hours19 of the, secretary;'s services, amounting to $719 .25 in fees and $122 for "overtime~air conditioning" on January 5, 2003 . Generally., , 190f,,respondent's objection to administrative secretarial services, 7 .32'hours of the 9 .59 hours of entries respondent objects to are not included among respondent's other objections . The 1 .5'hour entry dated Feb . 21, 2003, is included in respondent's . objections to entries related to JosephNunan, discussed supra part III .B .8 . The .77-hour entry dated°Feb . 21, 2003, is included in respondent's objections to excessive time spent, on the-'May 30, 2003, status report, discussed' infra °part III .D . - Furthermore, petitioners' amended fee and expense request- includes 49 .98 hours of entries related to the secretary's services . Respondent has objected to 34 .3 hours of these entries for reasons other than their being an overhead expense . Because respondent'has"expressly objected to only 41 .62 hours of the'' secretary's services, we assume that respondent did not intend to object't.o'the remaining 8 .36 hours of the secretary's services- ., As a result, we have only included 7 .32 of the 49 .98 hours in our calculation' of the total number of hours to which 'respondent° objects . - 55 - overhead expenses,, such as, routine administrative tasks,' are not. properly billable to clients and . thus (cid:127) cannoe',be billed (cid:127)to' , respondent . Hensley v . Eckerhart , supra at 434 ; Young v . Commissioner , T .C . Memo . 2006-189 : Secretary's Service s Some of .the services the secretary provided are similar to those of=a paralegal . For example, one of the secretary's tim e entries, dated'August 5 2003,-states : "Preparation"of all attorney responses to 7/11/03 Court order ." Another entry, dated February-18,,-2004, states : ",Preparation of pleadings[ .] Preparation of response to Court's Feb . 4 order for-filing ." These-types ofservices'are'directly related to the Dixon V remand- proceeding and'are compensable . The secretary's services to which respondent objects are as- follows : (1) 1 .5 hours on'February 21,,2003, for "'Draft letter t o NY Bar association regarding Nunan'finalized and send out along with letter to clients re[ :](cid:127) same"- ; (2)' .77 hour on May 29, 2003, described 'as "File Prepare'-for filing and send lout'' status report" ; (3) 1 hour on August 25, 2003, described as "Preparation of travel plans for .September 5 status-conference" ; (4) 2 .02 hours on August 11, 2004'; described as .!"Preparation for travel plans for Minns and Williams, send itinerary to clients attending hearing" ; (5) 2 .93 hours on September 11, 2004,-described-as "Preparation for tria l strategy meeting," ; '(6)' .52 hour on May 16, 2007, described as "File-Draft -[sic] cover letter and .file Hbngsermeier notice of - 56 - appearance .:with Tax Court" ; and (7) .85 hour on May 18,~ .~2007,, described as "Preparation of government [sic] status report . for , distribution and distribute" . .,In Young we explained : "As any billing attorney can attest, these are the types of attorney time charges that, however necessary-the underlying activity, are difficult to justify on a ,client invoice ." Because these are not activities for which Minns could bill ' his . clients, we will not award them to petitioners However,-because we disallowed the entry dated February 21,,2003 , in our, section dealing with Minns' 1 .5 hours of researc h concerning, :;Nunan, we will not reduce petitioners' awardtwice for .that-entry:. Accordingly, we reduce petitioners'erequested award- by 8 .09 hours of the administrative secretarial services,,, , amounting to°$606 .75 in fees . (cid:127)b . Overtime Air Conditionin g Unlike theentries pertaining to the secretary',s services, air conditioning is an overhead expense . We therefore-reduce , gpetitioners'arequested expense award by the $122 in expenses . .,,, .pertaining, .to overtime air conditioning . 12 . Inadequately Described Entrie s c..r Respondent also claims that 16 .16 hours of the requested fees and $11,90 .41.03 in expenses in petitioners', .current application are not adequately described so that .we can .. determine whether-those .entries are related to the proceeding on remand . ;,Of the~.16 .16 hours, 9 .32 are attributable to Minns and 6 .84Fare attributable to Williams .--However-in-their amended-fee request petitioners deleted 283 hours of Minns'd services'on June 5, - 57 - 2003 . With regard to the remaining 13 .33 hours (16 .16 minus 2 .8 3 equals 13 .33), we agree with respondent that those entries are too vague to enable us to determine whether they are reasonabl y related to the Dixon V remand proceeding . For example, one entry dated November 29, 2004, claims that Minns ..spent .1 .82,hours "review[ing] Tax Court orders'and pleadings" . Because we cannot determine whether these-Tax Court orders were related to the Cour t f Appeals for th.e;iNinth .Circuit's primary mandate,or-anothe r ;matter entirely, we cannot determine whether theal .82,hours,are reasonably : related to the proceeding on remand . We'also agree with respondent that the expenses totaling $11,904 .03 are inadequately-described . The entries refer to $600 for "pilot group meetings", $1,200 in long distance charges .- between 2003 and 2006, $10,004 .03 for copying and . mailing expenses, and $100 for a "small group lunch" . We cannot determine the content orwsubject matter of the pilot group meetings, long distance phone calls=, copied . and mailed document-s, ;or "small group lunch" . We will therefore follow the same approach as discussed in our ."Client Relations" section , supra , and reduce the award for these expenses by,-50 percent . L Therefore, ; we reduce petitioners' requested award by 13, .33x, hours, amounting, to $3,468 .50 in fees, as well as $5,952 .02 in expenses , - 58 - allocable as follows : 'Minns Williams Expenses Total Rat e $350 175 - - ' .13 . Miscellaneou s 6 .4 9 6 .8 4 13 .33 $2 ;271'.50 1,197 .0 0 5,952 .02 9,420 .5 2 °Respondent-also objects to 31 .77 hours of entries'fo r miscellaneous- reasons . Of these, 21 .74 are attributable to'"Minns , 5 .08~are attributable to Williams, and 4 .95 are attributable-'t the paralegal, as follows : Minns Williams Paralegal ''Total Rate $350 175 100 --- Hours 21 .74 5 .08 4 .95 31 .77 Amoun t $7,60 9 88 9 49 5 8,993 .0 0 We"'will address in turn respondent's miscellaneous objections to entries relating to the services of Minns, Williams, and th e paralegal . Minns' Service s The 21 .74 hours attributable to Minns' services area s follows : hours on April 30, 2003, 5 .83 hours on April 30, 2003, .5 hour on May 8, 2003, 1 hour on June 30, 2003, 1 hour on'Januar y 5, 2004,'' .83 hour on January 21, 2004, 2 hours on September 28 , 2004 .5 hour on December 30, 2004, .5 hour on February 4, 2005, 59 - '1-hour on February 25, 2005,' .25 hour on February 28, 2005, 3 .97 .hours on May 8, 2005, 1 .08 hours on May 10, 2005,'l hour on May 18, 2006, and .28 hour on May, .15, 2007 . The entry dated April 30 ;,2003, claims that Minns-spent 2 hours that day discussing petitioners'' tax liability with Snell (the accountant) . =Respondent argues that these hours are'n.o t isuffic'iently related to the proceeding on remand .- We(cid:127)disagree ; calculatingpetitioners',tax liabilities was essential to*the .remand proceeding . Moreover, Snell's participation in the reman d proceeding was so extensive that it resulted in Snell replacing Minns at the counsel-table during the-Las Vegas trial session . Thus, we make no adjustments-to petitioners'--award for this entry . = The entry dated"April 30, 2003, 'claims' that" Minns spe n't' 5 .83 hours that day researching-tax shelters . Respondent claims that .this research is not sufficiently related to the proceeding following the Court of Appeals for the Ninth Circuit's primary mandate in Dixon V .- We agree with respondent and reduce petitioners' award-by-5 .83 hours'of Minns' services related'to=, researching tax shelters . The entry dated May B, 2,003, claims'-that Minns ' spent t . S hour that day discussing a'status report-with Binder . "Respondent objects that Porter & Hedges' timesheets-indicate-that the' discussion lasted only .3 hour . We think that a .2-hour time difference is reasonable and decline to reduce-petitioners' award relating thereto . - 60 - The entry dated June 30, 2003, claims that Minns spent 1hour that, day ina„telephone conference with Binder . Respondent argues that the timesheets of Porter & Hedges reflect that the .conference lasted(cid:127),no more than .5 hour . We agree with respondent=and reduce the amount awarded for this entry by .5 hour . -The .entry dated January 5, 2004, claims that Minns spent=l, hour reviewing the Tax Court Rules and speaking,to Wolfe .Schroeter (Schroeter),=an attorney listed as practicing family law in=Texas . Respondent argues that this entry is not sufficiently related t o the,proceeding on remand . We agree . .Petitioners have not shown that Minns' review of the,Tax Court Rules and: consultation with Schroeter were reasonably related to the Dixon V remand proceeding . Moreover, petitioner s have not .,responded to respondent's contention that Schroeter does not practice tax law . Without elaboration, we cannot determine what,', connection--if any--Minns' conversation with Schroeter, ;.has with ascertaining the terms of the Thompson settlement . therefore-reduce petitioners' award for this entry . by 1 hour of Minns's services . The ; entry dated January 21, 2004, claims that Minns spent .83 hour reviewing=a letter from Binder and calling Binder .' Respondent objects that this conflicts with the Porter & Hedges timesheets,,=which indicate Minns and Binder's telephon e conversation lasted .5 hour Even if the telephone conversation lasted only .5 hour, we do not think it is unreasonable for . - 61 - petitioners .to request an award for- . .83 hour for-this entry .- If . ' we take into-account that Minns not,only spoke to Binder but als o reviewed'Binder's letter,- it is reasonable that Minns'(cid:127)--timesheet- reflects a longer period than .does .Porter &'Hedges' . Therefore ; we allow this entry-in its entiret y The entry 'on Sep t ember 28,'2004,,-claims that-Minns spent 2T hours reviewing a'-letter from Binder, written'to IRS Chief Counsel B . John Williams (B'.J Williams) . Respondent objects that 'there is no record of ,a letter from'Binder to B .J :--Williams-reflected in Binder's timesheets(cid:127) . We disagree with respondent . On January 25, 2005, Binder recorded that he drafted and revised a'-letter to B .J . Williams and sent a copy of the letter-to all counsel of record-for review . There is-a-discrepancy between Binder's and Minns' entries as to when the proposed letter to B .J . Williams was written, which, as previously mentioned, is not the first time Minns' entries have been . inconsistent with-Binder's . However, we-are 'satisfied, notwithstanding respondent's objection, that'Minns spent 2 hours reviewing Binder's draft letter . We note in passing that respondent did not object to the time that Binder 'spent in preparing theletter-and that"possibly the letter was never sent . We-will not reduce petitioners, fee award for this entry . The'entry dated December 2004, claims that Minns spent'-- .5/- hour reviewing a stipulation to take the deposition of Peter D . Bakutes (Bakutes), Deputy Regional Counsel for Tax Litigation for - 62 - the Western Region in San Francisco . Respondent argues ._that Bakutes' testimony had already been taken on December,7,,2004 . However, contrary to respondent's objection, the stipulation tot take ;Bakutes' testimony on December 7, 2004, was filed with-the , Court'on December 8, 2004 . Nonetheless we will not award any fee s forrMinns' ..review of the stipulation to take .Bakutes' testimony . The document contained less than one full page of text . Additionally, it was of little importance on December 8, .2004, =because-Bakutes' testimony had already been taken . Therefore , Minns should have expended no more than a de minimis,amount o f time reviewing, the stipulation to take Bakutes' testimony . , Accordingly, we will reduce petitioners' requested award by, :5 hour :-of Minns', . services, amounting to $175 in fees . _The entry dated February 4, 2005, claims that Minns spent . .5 hour that . day reviewing petitioners' second motion for a hearing, which-Binder(cid:127)fi .led on February 3, 2005 . Because the second motion for a hearing was related to the Dixon V remand proceeding ; and the :hearing was later held in Washington, D .C ., we allow this entry in its entirety. ; The entry dated February 25, 2005, claims that Minns spent 1 hour . thatdayreviewing an order issued on February 22, 2005 . Respondent . argues correctly that no order was issued on February 22-,2005, .- We thus reduce petitioners' award by 1 hour, .amounting to $350-in fees . I - 63 - The entry dated February - 28 , 2005,'- claims - that '(cid:127)Minns spent .25 hour reviewing an°order ' issued February --' 24,2005 . Respondent objects that we-did not issue an order on February 24 ;-2005 : agree with respondent and reduce petitioners' award 'by .25 hours of Minns' services, amounting-to $87 .50 in Efees . ' :The entry'dated May 8,'2005', . claims that Minns spent 3 .97 hours that day reviewing Binder's draft supplement to petitioners' motion to allocate the burden of proof, .which petitioners,,claim was filed on September 9, 2004 . Respondent argues that-no supplement' to the motion to--allocate the burden of proof was ever filed . We agree with respondent, and we need not award fees fo r hours wasted through inefficiency .= See Hensley v .-Eckerhart -,(cid:127)46 1 U .S . at-436-437 ;, Young v . Commissioner ,'T .C . Memo . 2006-189 .- Therefore, we will'reduce petitioners' requested award by'3 .97 hours of Minns' services, amounting-'to $1,389 .50 in fees, relate d to this entry . The entry dated-May 10, 2005 ; :claim6,that Minns spent 1 .08 hours on phone calls with Binder and a'client conference : ' Respondent objects .that Porter & Hedges' timesheets donot reflect that Minns and Binder spoke-on that date .- We'agree"with, . Ii respondent that petitioners should not receive an award for -time attributable to a conference with'Binder that-never''happened . Accordingly, we-will reduce the amount,awarded to petitioners by 50-percent . 64 - ,We also . note that the remaining portion of the entry i s attributable to nonspecific client communications . For the reasons . discussed in our "Client Relations " section , supr have - determined that we will award only 50 percent of th e requested award for entries pertaining to client communications that'do not specify the subject matter of those communications . We_reduce' petitioners ' award pertaining to the entry dated May, 10 ;,2005 . .by,75, percent or . 81 hour of Minns' services , amountin g to $283 . .50rin fees . The entry dated May 18, 2006, claims that Minns spent,l hour in-conference-with a client and in a telephone conference with all counsel . Respondent objects, arguing that the Porter & Hedge s timesheets,indicate that the conference lasted only .5 hour.;. W e agree with respondent that the conference was only .5 hour . However,,the~entry indicates that Minns also held a conferenc e with a client . By inference, the remaining .5 hour of the May 18, 2006, entry-i-s attributable to that client conference . Because we have determined that we will award only 50 percent of nonspecifi c ,client relations entries, we reduce the award for this entry by .25 hour,, which is 50 percent of the .5 hour attributable to a client, conference, amounting to $87 .50 in fees . The entry dated May 15, 2005, states that Minns spent .2:8 hour that .day .composing an email to Snell regarding stipulated decisions in the Chapin and Meyner cases . Respondent argues-that these stipulated decisions are not sufficiently related to the 65 proceeding on remand . We agree and reduce petitioners' requested award by' .28-hour . Therefore, after reviewing respondent's miscellaneous objections to Minns' fee entries, we have reduced petitioners ' requested award by 14 . 39 hours of Minns', services,- totaling $5,036 .'50 injfees . Williams' Service s The 4 .33 hours of Williams ' services respondent objects to comprise : .5 hour on - January ' 5,~ 2004,' 2 hours (cid:127) on September 28, 2004, .5 hour on February 4, 2005 ; . 25 hour- on February 28, 2005, and 1 .08 hours oh'May13, 2005 : The entry dated ' January ' 5,/. 2004 , states that-,Williams spent .- . 5 hour reviewing Tax Court Rules and speaking with Schroeter- . ;Respondent objects that these activities . .' are - not sufficiently related to the proceeding on remand . We agree with respondent for -the same reasons as those'in our discussion of a nearly identical entry referring to Minns' services . - See supra .,,part - III .B .13 .a .- We .reduce petitioners ' requested award by .5 hour of -Williams' services ,, amounting to $87 .50 in fees . The entry dated September-28,o2004, states that_Williams F ,~ .spent 2 hours - reviewing a "memo" Binder had written .to'B .J - Williams . For the "reasons ' provided in our discussion of a nearly identical entry -related to Minns' review of .:the proposed letter to B .J . Williams, we decline to make any - adjustments to petitioners' award for this entry . See supra part III .B .13 .a . - 66 - .The-entry.dated February 4, 2005, states that Williams spent .5 hour reviewing petitioners' second motion for a hearing, which Binder-filed on ,February 3,,2005 . Respondent argues that=:,this i s not sufficiently related to the proceeding on remand . disagree . This motion resulted in our ordering the final hearing session in Washington, D .C . We will not reduce petitioners' requested award for this entry . .The entry dated February 28, 2005, states that Williams spen t .25 hour reviewing an order we issued on February 24, 2005 . Respondent argues correctly that no order was issued on February 24, 2005 . ,Accordingly, we reduce petitioners' requested award by .25 hour- .of Williams' services . The- ;entry dated May 13, 2005, states that Williams spent 1 .08 hours .-in a-conference with a client, followed by ,a conference wit h Minns-,and Binder . Respondent objects that the Porter &,Hedges timesheets'do not reflect a teleconference on that date . We agree with respondent .- For the same reasons as those in our discussio n of respondent's objection to a nearly identical entry related t Minns':,.services, see supra part III .B .13 .a, we reduce .petitioners' award by ~.81ahour, 75 percent of the value of this entry. After reviewing respondent's miscellaneous .objections-to .Williams'-.services, we reduce petitioners' requested award by a total .of 1 .56 hours of Williams' services, amounting(cid:127)to $273 in fees . C _ 67 _ c . Paralegal Service s Respondent raises several miscellaneous objections to 4 .95'. . hours of paralegal services . Those"4 .95 hours comprise--the following entries :5 hour on'February"18, 2003, 1 AS hours .onl- . February 19, 2003, and 3-hours on October'23, 2003 . The entry"dated,,(cid:127)February-18, 2003 ; ..-states that the paralegal spent .5 hour preparing a letter'tof-be sent to :B .J . Williams. Respondent argues that the letter'to B .J . Williams was no . We disagree-for t sufficiently related to the proceeding on remand the reasons stated in our earlier discussion of a"similar entry pertaining'to Minns'" services . See supra part III .B .13 .a . Therefore we-will=not deduct any portion of this time entry from .petitioners" requested' award . The entry dated February 19 ., 2003, states that Minns ' paralegal spent-1 .45 hours preparing contracts'to'send to the new pilot group . Respondent objects that these are engagemen t agreements and not part of the Dixon V remand proceeding . We agree with respondent ; engagement agreements are not sufficiently related to the Dixon V remand proceeding'to merit our awarding fees -for preparing them . We"adjust .petitioners' requested award . :'downward by 1 .45 hours of-paralegal, services, amounting to $145 . .The entry .dated October 23, 2003, states that Minns ' paralegal spent 3 hours preparing a status report . Responden t objects . that Binder, not Minns, prepared the status report and that 3 hours is excessive for preparing an eight-page status 68 - report . We agree with respondent ; 3 hours is excessive for reviewing an .eight-page status report. We think that l .hour is a reasonable , amount of time to have spent reviewing an eight-page status,report . We reduce petitioners' requested award by 2 hours of the paralegal's services, amounting to $200 in fees . Therefore ;, after considering respondent's objections to miscellaneous fee entries related to the paralegal' s services,-we reduce petitioners' requested award by an additional . 3 .45 hours i n paralegal time, amounting to $345 in fees . °d . Tota l Accordingly, we deduct a total of 19 .40 hours of, entries corresponding to respondent's miscellaneous objections, amounting to $5,654 .50 in fees . Of these hours, 14 .64 are attributable to Minns' services, 1 .56 are attributable to Williams' services, and 3 .45 are, attributable to Minns' paralegal's services . Minns Williams''' Paralegal Total Rate $350 175 100 --- Hours 14 .39 1 .56 3 .45 19 .40 Amoun t $5,036 .5 0 273 .0 0 345 .0 0 5,654 .5 0 14 . Total Reductions for Entries Not Reasonably Related to Dixon V Remand Proceeding After-,examining the entries that respondent objects to as not reasonably,related to the Dixon V remand proceeding, we have reduced petitioners' requested award by 736 .89 hours of services , amounting to'$191,976 .50 in fees and $6,236 .44 in expenses . 69°- Therefore, 'after oiir reductions in response to respondent's objections, petitioners would be left with an award of $484,038 .75 in fees (tabulated below) and $15,289 .55 in expenses . Requested Disallowed" Remaining . " Rate Awar d Hours Hourly Minns Williams ParalegalSecretary Total 1,533 .29-738 .27 124 .18 49 .98 2,445 .72 - 441 .59 194 .06 74 .66 26 .58 728 .47 t-1,091 .70 544 .21 49 .52 23 .40 '1 ;717 .25 $350 175 100 75 - $382,095 .0 0 95,236 .7 5 4,952, .0 0 1,755 .0 0 $484,038 :7 5 C . Reliability of Documentatio n Respondent has asserted-and .Minns,does .not deny .that the Minns Law-Office did not maintain-comtemporaneous,timesheets . This is the primary reason that respondent rejected-Minns' .belated efforts to reach an agreementlon fees and expenses . Respondent was able to reach-agreement on thi,s .subjectywith Irvine-and Stich t because they had maintained the necessary records and had started presenting them to respondent many months before we ordered all petitioners in the Dixon V remand proceeding to file their fee and expense requests with the Court . It is our understanding that th e Minns Law Office created the entries to support the Minns reques t by using the Porter & Hedges entries as a starting point . We are left with the definite impression that - the 'use of thi s method by the Minns Law Office has resulted in the"claim of a total number of hours that approaches the number of hours that respondent agreed amounted to a reasonable expenditure'of time b y Porter & Hedges, which by informal agreement with all counsel, - 70 - took the-Jeading ;role on behalf of petitioners in the,Dixon ;V remand,proceeding .,2 0 After having addressed respondent's specific objections .to; the reasonable relationship of various tasks undertaken by th e Minns,-,Law Office to the Dixon V remand proceeding, we are lef t withz,;a,lack of .confidence in the accuracy of the figures for th e remaining hours .. In Dixon IV we imposed one-third across ,-.the- board reductions to petitioners' fee requests because, o f inadequate substantiation by their counsel . D, Duplicative and Excessive Effort s We nowaddress respondent's objections that the number of, ,hours,,of!services petitioners request is excessive and includes , duplicative .efforts . Respondent specifically points to. : ., 83 .07 -hours,'amounting to $25,609 .50 in fees ,21 related to preparing the May~e30, 2003 ; .status report ; 211 .09 hours, amounting to $49 .,288 . .2 5 We have nevertheless dealt with respondent's specifi c objections to time spent on various tasks by assuming the accuracy and correctness of the amounts of time claimed for the purpose of .removing them from the total . 2 1Respondent',s objections to entries related to Minns and his staff's preparation of the May 30, 2003, status report are attributable as follows : Minns ,Williams Secretary Total Rate $350 175 75 --- Hours 63 .71 18 .59 0 .77 83 .07 Amoun t $22,298 .5 0 3,253 .2 5 57.7 5 25 ;, 609 .50 :4. 71 - in fees," related to preparation for-hearings and depositions ; 88 .37 hours of other miscellaneous entries, amounting to $26,222- in fees ; 23,and $ 4,135 .96 in travel expenses related to the hearings . '' However, because we-find that Minns ! efforts as . a whole are excessive ,, we decline to reduce petitioners ' award'on ."the basis of respondent ' s individual objections to excessive time and fees . Instead, we ' will apply'an .across - the-board reduction of one-third to petitioners ' remaining award . 1 . Excessive Fees and Expense s We agree with' respondent ' s assertions that many of the entries in- petitioners ' fee requestare'excessive .-,Minns,, ha s claimed excessive,hours .and expenses for preparing the May 30 , ;2003, status report, preparing for hearings, travel, and in general . In comparison to the-other firms, Minns and his staf f 22Respondent's/objections to entries . related to Minns and ,his staff's preparation for hearings and depositions'are attributable as follows : . . Minns Williams Paralegal Total Rate $350 175 100 . Hours 71 .20 138 .39 1 .50 211 .09 Amount $24,920 .0 0 24,218 .2 5 150 ..0 0 49,288 .2 5 23Respondent's objections that other, . miscellaneous entries are excessive are attributable as follows : Minns - Williams Total Rate $350 - 175 --- Hours 61 .47 26- .90 88 .37 Amount $21,514 .5 0 4,707 .5 0 26,222 .00 spent, approximately twice the time preparing the status report - 72 - they filed 2 4 Moreover, the Minns Law Office's participation in the°hearing sessions,~,and ;depositions was minimal . Minns attended only the, first day,ofboth the August 18-19, 2003, Houston status conference and the September 20-22, 2004, hearing session . Additionally, . although Williams attended the status conferences and the hearing sessions, she did not actively participate - in . the proceedings . However, despite our agreement with respondent tha t M24Minns .and his associates claim to have spent 79 .5 hours drafting the status report on behalf of the Hongsermeiers . The report Minns-filed contained approximately three pages of singlespaced text . Binder and Irvine spent approximately 67 .35 hours preparing the'status .report filed on behalf of the Dixons and the Dufresnes . The body of the status report prepared by Porter & Hedges' . attorneys contained approximately 10 pages of doublespaced text . Sticht's time sheets indicate that he and his associates spent approximately 30 2 hours preparing the status report filed on behalf of certain non-test-case petitioners . Sticht's-report contained approximately three pages of double-spaced text and was submitted with several attached exhibits . Approximately three pages-of--the'attached exhibits were Sticht's own work, prepared for the 'status report . Izen's timesheets indicate that he and his associates spent approximately 31 .58 hours between preparing the status report Izen filed on behalf of the Youngs and the Owenses . The report Izen :.filed contained approximately five pages of double-spaced text . Jones'"timesheets indicate that he and his associates spent 8, .96-hours preparing the status report and the report contained approximately three pages of double-spaced text . 73 - these hours and'expenses'are excessive, we make no reductions to petitioners' award on the separate bases of respondent's objections . 2 . Reduction-for Duplicative and Excessive Effort s We do not find that this .inflation of hours is limited to the entries respondent objects to .as excessive . The hours and expenses ' in' Minns''timesheets(cid:127)are generally excessive"and'are duplicative of the services provided by Binder . We will therefore apply a general reduction of'one-third to the fees for-the time remaining after we'addressed respondent's specific objections . Because the attorneys at Porter & Hedges performed the bulk of the work during the remand period,' we find that it would-be unreasonable and a duplication of effort for the other firms participating in the remand proceeding to bill as many hours. As note 15 supra shows, Minns and Izen both claimed more than 2,000 hours, on the'same or'der'of magnitude as the time claimed by the Porter & Hedges' attorneys, whereas-Sticht and Jones-claimed, more than 1,000 fewer hours than the time claimed by Minns an d Izen . We find and-hold that it would be unreasonable and an exercise'of poor billing judgment for Minns to bill almost as many hours as the Porter & Hedges attorneys . It is in the light\of this observation, coupled with .the lack of contemporaneous documentation for the Minns fee and expense request, that we reduce byone-third Minns' overall fee award for the remaining . 74 - time claimed . Conclusion To calculate the award, we first reduce Minns' and Williams' . .claimed hourly rates . We then reduce the hours petitioners have requested for Minns, Williams, the paralegal, and the .secretary by our downward . adjustments for fees not sufficiently related to the DixonV ;remand=proceeding which would leave petitioners a fee award of,$484,038 .75 . Then, we reduce the remainder by one-third (33-1/3 .percent) of the remaining fee amount, amounting to $161,346 .25,, to reflect "overlawyering" and lack of contemporaneous documentation . After completing these calculations, we find that petitioners are entitled to an award of $322,692 .50 in fees and $15,289 .55 in expenses . Giving effect to our concluding determinations in Dixon IX and GridleyIl, we shall invoke our inherent power to require respondent to pay to petitioners additional amounts equal to interest at the applicable rates for underpayments under sections 6601(a) and 6621(a)(2) on $322,692 .50 and $15,289 .55 from September-17, 2007, when petitioners filed their motion to amend 'their original request for attorney 's fees relating to the Dixon V 75 - remand proceeding .2 5 We will address the manner in which the awards are to be administered in .a separate order or orders implementing thi s opinion . To give effect to the foregoing , An appropriate order or orders . will be issued . 25We provide for accrual of amounts equal to interest from the later date petitioners amended their original request for attorney ' s .fees because their original request contained numerous errors that remained uncorrected until they .filed their amended request . I