Court Opinion

ID: 9895831
Source: CourtListenerOpinion
Date Created: 2023-11-08 20:03:10.919134+00
Date Added: 2024-06-11T09:12:20.063927
License: Public Domain

United States Tax Court

                               T.C. Memo. 2023-134

  CHAMPIONS RETREAT GOLF FOUNDERS, LLC, RIVERWOOD
          LAND, LLC, TAX MATTERS PARTNER,
                       Petitioner

                                           v.

               COMMISSIONER OF INTERNAL REVENUE,
                           Respondent

                                     —————

Docket No. 4868-15.                                       Filed November 8, 2023.

                                     —————

Vivian D. Hoard, for petitioner.

Matthew D. Thom and Teri L. Jackson, for respondent.

                          MEMORANDUM OPINION

       PUGH, Judge: This case is a partnership-level proceeding
governed by the procedural rules of the Tax Equity and Fiscal
Responsibility Act of 1982, Pub. L. No. 97-248, §§ 401–407, 96 Stat. 324,
648–71, which was in force when Champions Retreat Golf Founders,
LLC (Champions Retreat), filed its federal partnership return and when
petitioner, its tax matters partner, filed the Petition. Before the Court
is petitioner’s Motion for Reasonable Litigation or Administrative Costs
(Motion for Costs) pursuant to section 7430 and Rule 231. 1 We conclude
that petitioner is not a “prevailing party” within the meaning of section
7430 because the Internal Revenue Service (IRS or respondent)
“establishe[d] that the position of the United States in the proceeding

        1 Unless otherwise indicated, statutory references are to the Internal Revenue

Code, Title 26 U.S.C., in effect at all relevant times, regulation references are to the
Code of Federal Regulations, Title 26 (Treas. Reg.), in effect at all relevant times, and
Rule references are to the Tax Court Rules of Practice and Procedure.

                                 Served 11/08/23
                                     2

[*2] was substantially justified.” See § 7430(c)(4)(B)(i). We therefore will
deny the Motion for Costs.

                               Background

       The following facts are derived from our prior opinions in this
case, the parties’ pleadings and Motion papers (including the
Declarations and Exhibits attached thereto), and the parties’ Joint
Stipulation of Facts. Champions Retreat is a Georgia limited liability
company treated as a partnership for federal tax purposes with its
principal place of business in Augusta, Georgia.

I.    Conservation easement donation and reporting position

       Champions Retreat was formed on November 6, 2001, to develop
and operate a golf course. On April 5, 2002, Champions Retreat acquired
a 463.3-acre tract of land. On 95.34 acres it developed a neighborhood
called Founders Village, and on 365.56 acres it built a 27-hole golf
course. The golf course was completed in June 2005. The golf course has
three nine-hole courses: the Creek course, designed by Gary Player; the
Island Course, designed by Arnold Palmer; and the Bluff course,
designed by Jack Nicklaus.

      Champions Retreat was not profitable. After our decision in Kiva
Dunes Conservation, LLC v. Commissioner, T.C. Memo. 2009-145,
Douglas Cates, the accountant for Champions Retreat, proposed the
donation of a conservation easement on the property including the golf
course.

      Kiokee Creek, a Georgia partnership, was formed on September
24, 2010, as a vehicle for investing in Champions Retreat. Its 15 original
members, most of whom were Mr. Cates’s clients, contributed a total of
$2,705,000 for their interests. Kiokee Creek contributed $2,700,000 to
Champions Retreat in exchange for a 15% interest.

      On December 16, 2010, Champions Retreat conveyed an
easement to the North American Land Trust (NALT) that covered
348.51 acres of the golf course (easement area).

       Champions Retreat claimed a $10,427,435 charitable
contribution deduction on its Form 1065, U.S. Return of Partnership
Income, for the 2010 taxable year, for its grant of the easement to NALT.
Champions Retreat included with its Form 1065 a copy of an appraisal
performed by Claud Clark III that relied on the “before and after”
                                    3

[*3] method to value the easement. See Treas. Reg. § 1.170A-14(h)(3)(i)
and (ii). Mr. Clark concluded that the highest and best use of the
property unencumbered by the easement was as a residential
subdivision. On the basis of that conclusion, he calculated the fair
market value of the easement to be $10,427,435.

II.    FPAA

       In November 2014 the IRS issued a notice of final partnership
administrative adjustment (FPAA), denying Champions Retreat’s
$10,427,435 deduction because the conservation easement did not meet
the requirements of section 170 and the easement did not have a value
greater than zero. The FPAA stated four alternative positions: (1) the
transfer of the 15% partnership interest from Champions Retreat to
Kiokee Creek was a disguised sale; (2) Champions Retreat’s allocation
of the deduction to Kiokee Creek had no substantial economic effect;
(3) Champions Retreat failed to comply with section 704 in decreasing
capital accounts of the members receiving the charitable contribution
deduction allocation; and (4) Champions Retreat improperly allocated
interest income and ordinary business loss to its members. Petitioner
timely petitioned this Court for redetermination.

III.   Litigation history: Champions I–III

        Petitioner argued at trial that the contribution of the easement to
the NALT satisfied two conservation purposes: (1) “the protection of a
relatively natural habitat of fish, wildlife, or plants, or similar
ecosystem” and (2) “the preservation of open space (including farmland
and forest land) where such preservation is . . . for the scenic enjoyment
of the general public . . . and will yield a significant public benefit.”
§ 170(h)(4)(A)(ii) and (iii). To support its contentions petitioner offered
several expert witnesses: Keith Lawrence on land planning and civil
engineering; Leslie Ager on fisheries biology; Christopher Wilson on
wildlife biology and conservation; and Lee Echols on botany,
conservation biology, and ecology. Respondent offered Reed Noss, who
testified on conservation biology.

       The parties also offered expert witnesses to value the easement
donated. Petitioner hired Mr. Clark, this time to prepare an expert
report. Mr. Clark determined that before the easement grant, the
highest and best use of the property was as a partial residential
subdivision with an 18-hole golf course, and after the easement grant, a
27-hole golf course. Using the “before and after” method, he opined that
                                      4

[*4] the fair market value of the conservation easement was
$10,883,789. Petitioner also offered the opinion of Thomas F. Wingard
on the highest and best use of the property. Mr. Wingard concluded that
the highest and best use of the property before the easement was as a
partial residential development. Respondent offered the opinion of
David G. Pope. Mr. Pope concluded that the highest and best use of the
property before and after the easement grant was the operation of the
golf course. According to Mr. Pope, because the highest and best use of
the property remained the same before and after the easement grant,
the fair market value of the conservation easement was $20,000.

       In Champions Retreat Golf Founders, LLC v. Commissioner
(Champions I), T.C. Memo. 2018-146, at *35–36, we concluded that
Champions Retreat was not entitled to a deduction for a qualified
conservation easement contribution for the 2010 tax year because its
donation of a conservation easement in that year had not satisfied the
conservation purpose requirement of section 170(h). Because we
determined that Champions Retreat’s easement donation did not entitle
it to a deduction, we did not value the easement. Champions I,
at *35–36. In Champions Retreat Golf Founders, LLC v. Commissioner
(Champions II), 959 F.3d 1033, 1041 (11th Cir. 2020), the U.S. Court of
Appeals for the Eleventh Circuit concluded that Champions Retreat is
entitled to a charitable contribution deduction under section 170 for its
donation, vacated our decision in Champions I, and remanded the case
to us to determine the proper amount of the deduction. This remand
required us to value the conservation easement at the time of the
donation (and therefore the proper amount of the deduction).
Champions II, 959 F.3d at 1041. In a supplemental memorandum
opinion, Champions Retreat Golf Founders, LLC v. Commissioner
(Champions III), T.C. Memo. 2022-106, at *41, we determined that the
proper amount of the deduction is $7,834,091.

IV.   Petitioner’s Motion for Costs

      Petitioner moved for costs under section 7430 and Rule 231.
Respondent filed a Response to the Motion for Costs, and petitioner filed
a Reply to that Response. In its Motion for Costs, petitioner requested
an evidentiary hearing with respect to an internal IRS appraisal
prepared before the FPAA was issued.

      Rule 232(a)(2) provides that “[a] motion for reasonable litigation
or administrative costs ordinarily will be disposed of without a hearing
unless it is clear from the motion, the Commissioner’s written response,
                                          5

[*5] and the moving party’s reply that there is a bona fide factual
dispute that cannot be resolved without an evidentiary hearing.” The
internal appraisal that is the basis for the hearing request was not
admitted into evidence although petitioner’s expert considered it in
developing his opinion. We excluded the appraisal from evidence
because trial was de novo and respondent’s position was the one taken
in the FPAA and his Answer. See Greenberg’s Express, Inc. v.
Commissioner, 62 T.C. 324, 327–28 (1974) (“As a general rule, this Court
will not look behind a deficiency notice to examine the evidence used or
the propriety of [the Commissioner’s] motives or of the administrative
policy or procedure involved in making his determinations.”). Petitioner
has not explained how the position taken in an internal appraisal before
the issuance of the FPAA or filing of respondent’s Answer is relevant to
our evaluation of the reasonableness of respondent’s position in the
FPAA or the Answer. The opinion offered in that appraisal does not
make respondent’s litigating position more or less reasonable. And
whether respondent adopted or rejected the analysis in the internal
appraisal, we still must evaluate whether his position was reasonable
on its face. Therefore, because it is not “clear from [the motion papers]
that there is a bona fide factual dispute that cannot be resolved without
an evidentiary hearing,” Rule 232(a)(2), we will decide the Motion
without a hearing.

                                     Discussion

       Section 7430 provides for the award of litigation or administrative
costs to a taxpayer in a proceeding brought by or against the United
States involving the determination of any tax, interest, or penalty. An
award may be made where the taxpayer can demonstrate that it: (1) is
the “prevailing party,” (2) has exhausted administrative remedies
within the IRS, 2 (3) has not unreasonably protracted the proceeding, and
(4) has claimed “reasonable” costs. § 7430(a) and (b)(1), (3), (c)(1) and (2);
Alterman v. Commissioner, 146 T.C. 226, 227 (2016). The taxpayer bears
the burden of proving that these requirements are met. Rule 232(e). The
requirements are conjunctive; failure to satisfy any one of them
precludes an award of costs to the taxpayer. See Alterman, 146 T.C.
at 227; see also Minahan v. Commissioner, 88 T.C. 492, 497 (1987). The
decision to award fees is within the sound discretion of the Court. See
Rasbury v. IRS (In re Rasbury), 24 F.3d 159, 165–68 (11th Cir. 1994)
(“[D]enial of a section 7430 motion is reviewed for abuse of discretion.”).

       2 This requirement applies only as to litigation costs. See § 7430(b)(1).
                                     6

[*6] Respondent disputes that petitioner satisfies the first
requirement (whether it qualifies as the “prevailing party”) and the
fourth (whether it has claimed “reasonable” costs); respondent concedes
that petitioner exhausted all available administrative remedies and did
not unreasonably protract the proceeding. We begin with the first
requirement.

I.    Prevailing party

       To be the “prevailing party,” a party must “substantially
prevail[]” with respect to the amount in controversy or “the most
significant issue or set of issues presented,” see § 7430(c)(4)(A)(i), and
must satisfy certain net worth requirements, see § 7430(c)(4)(A)(ii).
Respondent agrees that petitioner “substantially prevailed” in the case.

      A party will not be treated as the prevailing party, however, if the
Commissioner establishes that “the position of the United States in the
proceeding was substantially justified.” § 7430(c)(4)(B)(i). The
Commissioner bears the burden of making that showing. Id.

       Respondent contends that petitioner is not the prevailing party
because it failed to prove that it meets the net worth requirement and,
even if it did meet that requirement, because respondent’s position was
substantially justified. Failing either prong would be fatal to petitioner’s
Motion for Costs. As we explain below, we agree with respondent that
his position in this proceeding was substantially justified. We therefore
need not address whether petitioner meets the net worth requirement
of section 7430(c)(4)(A)(ii).

       When a taxpayer seeks both administrative and litigation costs,
we apply a bifurcated analysis to determine whether “the position of the
United States” was substantially justified in the administrative
proceeding and the litigation. Maggie Mgmt. Co. v. Commissioner, 108
T.C. 430, 442 (1997). For purposes of the administrative proceeding, the
IRS’s position is that taken at the earlier of (1) the date the taxpayer
receives the decision of the IRS Appeals Office or (2) the date of the
FPAA. See § 7430(c)(7)(B); Bliss Valley Growers v. Commissioner, T.C.
Memo. 1994-533, 1994 WL 579951, at *2; see also Clovis I v.
Commissioner, 88 T.C. 980, 982 (1987) (comparing FPAAs to notices of
deficiency and concluding that they have similar functions). The
“position of the United States” in a Tax Court proceeding is generally
that set forth in the Commissioner’s answer. See § 7430(c)(7)(A); Maggie
Mgmt. Co., 108 T.C. at 442.
                                           7

[*7] In the FPAA and respondent’s Answer, the IRS’s primary position
was that the easement donation did not meet the requirements of
section 170 and the easement did not have a value greater than zero. 3
Respondent also listed several alternative theories that he later
conceded.

        A position is “substantially justified” if it is “justified to a degree
that could satisfy a reasonable person” or has a “reasonable basis both
in law and fact.” Swanson v. Commissioner, 106 T.C. 76, 86 (1996)
(quoting Pierce v. Underwood, 487 U.S. 552, 565 (1988)). The
determination of reasonableness is based on all the facts of the case and
the available legal precedents. Maggie Mgmt. Co., 108 T.C. at 443. A
position has a reasonable basis in fact if there is “such relevant evidence
as a reasonable mind might accept as adequate to support a conclusion.”
Underwood, 487 U.S. at 564–65 (quoting Consol. Edison Co. of N.Y. v.
NLRB, 305 U.S. 197, 229 (1938)); see also Maggie Mgmt. Co., 108 T.C.
at 443. A position has a reasonable basis in law if legal precedent
substantially supports the Commissioner’s position given the facts
available to him. Maggie Mgmt. Co., 108 T.C. at 443. The
Commissioner’s position may be substantially justified even if incorrect
“if a reasonable person could think it correct.” Id. (quoting Underwood,
487 U.S. at 566 n.2).

         Courts have found that the Commissioner’s position was
substantially justified in cases involving primarily factual questions.
See, e.g., Bale Chevrolet Co. v. United States, 620 F.3d 868 (8th Cir.
2010); see also Kaffenberger v. Commissioner, 314 F.3d 944, 960 (8th Cir.
2003) (finding government’s position substantially justified where
issues were of a “fact intensive nature”); Grant v. Commissioner, 103
F.3d 948, 953 (11th Cir. 1996) (“[I]t was not until the trial of this case
. . . that this matter could properly be resolved in the taxpayers’ favor.”),
aff’g T.C. Memo. 1995-374.

        Ordinarily, this Court reviews item by item, whereby “[t]he
justification for each of [the Commissioner’s] positions must be

       3 Although the title of petitioner’s Motion for Costs includes both litigation and

administrative costs, it focuses only on litigation costs. The documents submitted to
support its incurred costs correspond to the initiation of the proceedings in this Court.
And even though it contends also that respondent’s position in the FPAA was not
substantially justified, it does not distinguish between respondent’s positions in the
FPAA and in the Answer. Nor does it point to any change in the available facts and
circumstances or legal precedent between these dates. Therefore, we will not analyze
respondent’s positions separately. See Nguyen v. Commissioner, T.C. Memo. 2003-313.
                                         8

[*8] independently determined.” Foothill Ranch Co. v. Commissioner,
110 T.C. 94, 97 (1998). 4 We will analyze whether respondent’s position
was substantially justified with respect to the requirements of section
170, the value of the easement, and conceded issues separately.

       A.      Section 170

       The first hurdle petitioner must face is persuading us that
respondent’s position that the easement did not have a valid
conservation purpose, which also was our conclusion in Champions I,
was unreasonable. That is a tall but not an impossible hurdle to clear.
In Dixon v. Commissioner, T.C. Memo. 2006-97, 2006 WL 1275497,
at *10, we explained:

       Common sense dictates that if the Government was able to
       prevail at trial (only to lose on appeal), its position
       ordinarily will have been reasonable. See H. Rept. 97-404,
       at 15 (1981) (stating that in such situation “the appellate
       court would not normally award attorney’s fees to the
       taxpayer since the trial court, by definition, had found the
       government’s position to be reasonable”); S. Comm. on Fin.,
       Technical Explanation of Committee Amendment, 127
       Cong. Rec. 32070, 32078 (1981) (same); see also Ness v.
       Commissioner, 73 AFTR 2d 94-1195, at 94-1196 (9th Cir.
       1994) (fact that the Commissioner prevailed in the Tax
       Court, while “not dispositive”, is “significant”). On the
       other hand, it is “not always * * * true” that trial courts
       “[act] on a soundly reasoned basis in every tax case.”
       Huckaby v. U.S. Dept. of Treasury, 804 F.2d 297, 299 (5th
       Cir. 1986); see also Henry v. Commissioner, 34 Fed. Appx.
       342, 345 (9th Cir. 2002) (Court of Appeals had previously
       “found clear error in the Tax Court’s findings” on
       negligence issue, which “leads to the conclusion that the
       Commissioner’s position was not substantially justified”).

        4 An item-by-item review was rejected in United States v. Johnson, 920 F.3d

639, 649–50 (10th Cir. 2019), adopting a “holistic approach” that we followed in
Morreale v. Commissioner, T.C. Memo. 2021-90, because appeal of that case was to the
U.S. Court of Appeals for the Tenth Circuit. See Golsen v. Commissioner, 54 T.C. 742,
757 (1970), aff’d, 445 F.2d 985 (10th Cir. 1971). We are bound by Foothill Ranch and
follow that framework here but note that a holistic view of the Government’s position
would not change the outcome.
                                    9

[*9] We have carefully reviewed the Eleventh Circuit’s analysis of the
conservation purpose in this light. While we understand their firm
rejection of our analysis, we also note disagreement among the panel as
to whether the golf course satisfied the requirement to protect natural
habitat for valuable species of flora and fauna. The panel did agree that
the golf course preserved open spaces, but we see no basis in their
analysis for holding that our original conclusion that there was
insufficient public access to the property was unreasonable. And thus
we cannot conclude that respondent’s position in the FPAA as well as in
the Answer was an unreasonable one.

             1.     Natural habitat

       Determining whether the easement met any of the conservation
purposes pursuant to section 170 was a fact-intensive inquiry. We and
the Eleventh Circuit reached our decisions only after a careful
evaluation of all the facts and expert opinions, including five experts on
flora and fauna habitat.

        It was not unreasonable for respondent to question whether a
highly manicured and chemically treated private golf course would meet
the “relatively natural habitat” requirement. See Champions II, 959
F.3d at 1041–42 (Grant, J., concurring in part, dissenting in part) (“[T]he
presence of animals cannot hide that a lot of the easement is highly
developed and at least somewhat hazardous to certain species. And no
matter how many animals live on the Champions easement, the reality
remains the same: with the chemicals, imported grasses, large fans,
artificial drainage, and water pumping, it is not at all clear that the
easement amounts to a ‘relatively natural habitat.’”). Petitioner did not
point to any law that would have rendered respondent’s position legally
unsupported. It relied on Kiva Dunes, see supra p. 2, but that case also
required an intensive factual inquiry. Respondent did not take the
position that the conservation purposes could never be met if an
easement encumbered a golf course. Furthermore, shortly after this case
was petitioned, we denied a deduction for the contribution of an
easement on a golf course under similar facts. See Atkinson v.
Commissioner, T.C. Memo. 2015-236, at *34–39 (determining that an
easement encumbering a golf course failed to provide relatively natural
habitat for the few rare, endangered, or threatened species sighted on
the property because of the presence of nonnative grasses on the
property and the regular maintenance, mowing, and pesticide
application over the easement area, which severely impacted the quality
of the land as habitat).
                                    10

[*10]        2.     Open space

       The facts also provided a reasonable basis for respondent’s
position (and our conclusion) that the easement area did not provide an
open space for the enjoyment of the public. The golf course on the
easement area is gated and can be accessed only by its members, raising
concerns about whether and to what extent the public would be able to
enjoy this open space. Respondent relied on Treasury Regulation
§ 1.170A-14(d)(4)(ii)(B), which states that although physical public
access to the property is not required, “the public benefit from [a]
donation may be insufficient to qualify for a deduction if only a small
portion of the property is visible to the public.” The Eleventh Circuit also
cited that regulation. Champions II, 959 F.3d at 1040.

       Whether the easement satisfied the open space conservation
purpose ultimately came down to interpreting whether the portion of the
easement visible to the public provided “scenic enjoyment” or “a
significant public benefit.” See § 170(h)(4)(A)(iii). We (and respondent)
concluded that the limited views visible from a canoe or kayak were not
enough to satisfy the statute and the applicable regulations.
Champions I, at *32. The Eleventh Circuit disagreed, holding that the
trees visible over the high river banks was a much better view “[w]hen
compared to a condominium building or even private homes.”
Champions II, 959 F.3d at 1040.

       To show that his position was substantially justified, respondent
needs to demonstrate that his position was supported by “relevant
evidence as a reasonable mind might accept as adequate to support a
conclusion.” Underwood, 487 U.S. at 564–65 (quoting Consol. Edison
Co., 305 U.S. at 229); see also Maggie Mgmt. Co., 108 T.C. at 443.
Consistent with the applicable regulations and the facts of the case, it
does not seem unreasonable to conclude that views from the rivers alone
were too small a portion, even if ultimately the Eleventh Circuit
considered those views superior to other views along the rivers and
sufficient in quality and quantity to support the deduction. We therefore
hold that respondent’s position was substantially justified.

        B.   Valuation

      Valuation of the easement also was a fact-intensive exercise. As
we explained in Champions III, we had concerns about both parties’
valuations. First, petitioner’s valuation expert, Mr. Clark, changed his
conclusion as to the property’s highest and best use from the position
                                          11

[*11] taken in his appraisal in support of Champions Retreat’s return
position to his expert report at trial. He concluded originally that the
property’s highest and best use before the grant of the easement was as
a real estate subdivision but opined at trial that the highest and best
use was as an 18-hole golf course plus an additional subdivision. And at
trial he valued the property with a much smaller residential
redevelopment of the nine-hole Bluff course higher than he valued a
complete residential redevelopment of the entire 27-hole golf course. 5 He
ultimately opined that the fair market value of the easement was
$10,883,789. Respondent’s valuation expert, Mr. Pope, concluded that
the highest and best use before the easement was as a 27-hole golf
course. And he ultimately opined that the fair market value of the
easement was $20,000. Thus, the difference at trial between Messrs.
Clark and Pope was the development of the nine-hole Bluff course.

        Ultimately, in Champions III we reduced Mr. Clark’s valuation
because it was not supported by facts shown at trial. We also rejected
Mr. Pope’s valuation. That conclusion establishes both sides were partly
right: Petitioner was right that Mr. Pope undervalued the easement, and
respondent was right that Mr. Clark overvalued the easement (by a
meaningful amount). 6 But because we agreed with respondent that the
easement was overvalued, we conclude that he was substantially
justified in rejecting Champions Retreat’s original valuation on its
partnership return.

       C.      Conceded issues

       Finally, losing a case or conceding an issue “does not by itself
establish that the position taken is unreasonable” but is “a factor that
may be considered.” Maggie Mgmt. Co., 108 T.C. at 443.

      Respondent conceded several alternative theories for decreasing
the charitable contribution deduction in this case (conceded issues).
Because he did so before trial, we have no evidence in the record or the
benefit of any briefing specific to these conceded issues. As respondent

       5 In his appraisal Mr. Clark proposed a subdivision of 390 lots. In his expert

report he proposed a subdivision of 210 lots.
        6 The original valuation on Champions Retreat’s partnership return of

$10,427,435 and the later valuation at trial of $10,883,789 overstated the correct
valuation of $7,834,091 by 33.1% and 38.9%, respectively (rounded to the nearest
tenth). Stated another way, our determination that the easement was worth
$7,834,091 reduced the original and later valuations by 24.9% and 28%, respectively.
The magnitude of our adjustment is meaningful no matter how we calculate it.
                                   12

[*12] explained in his Response to the Motion for Costs, he conceded the
alternative theories to focus on the main dispute between the parties:
the conservation purpose and the value of the easement. The Supreme
Court has explained that “[a] request for attorney’s fees should not
result in a second major litigation.” Hensley v. Eckerhart, 461 U.S. 424,
437 (1983).

       In addition, petitioner did not indicate how much of its litigation
costs was allocable to addressing the conceded issues. Thus, even if we
concluded those alternative theories were not substantially justified, we
could not award litigation costs corresponding to the conceded issues.

II.    Reasonable costs

       Although respondent also disputes the last requirement—that
the claimed costs be “reasonable”—in the light of our resolution of the
“prevailing party” issue, we need not address it. See Minahan, 88 T.C.
at 497.

III.   Conclusion

        Because respondent showed that his position was “substantially
justified” under section 7430(c)(4)(B)(i), petitioner is not a “prevailing
party” entitled to recover costs. See § 7430(a), (c)(4).

       To implement the foregoing,

       An appropriate order will be issued.