Bouquett v. Commissioner , 68 T.C.M. 389 ( 1994 )

GASTON BOUQUETT AND RUBYE BOUQUETT, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent

Bouquett v. Commissioner

Docket No. 21777-92

United States Tax Court

T.C. Memo 1994-385; 1994 Tax Ct. Memo LEXIS 394; 68 T.C.M. 389; 94-2 U.S. Tax Cas. (CCH) P47,947;

August 16, 1994, Filed

---

">*394 Gaston Bouquett, pro se.

For respondent: James D. Hill.

BUCKLEY

---

BUCKLEY

MEMORANDUM OPINION

BUCKLEY, Special Trial Judge: This matter is now before us on petitioner Gaston Bouquett's motion for administrative and court costs. Respondent has filed notice of objection to the motion. After a full trial, our opinion in this matter was filed on May 12, 1994. ^{1994 Tax Ct. Memo LEXIS 394">*395 such an award. .}

Respondent agrees that petitioners have substantially prevailed in this proceeding as that term is defined in section 7430(c)(4)(ii). Respondent, however, does not agree that petitioners are the "prevailing party" under section 7430(c)(4), as respondent maintains her position in this matter was substantially justified.

Respondent, in her notices of deficiency, raised two main questions. 1994 Tax Ct. Memo LEXIS 394">*396 The third issue considered for trial was a refund claimed by petitioners for the receipt of disability income which they had originally reported on their returns as income and which they claimed in this Court was excludable income. While this Court held for petitioners on this issue, the question was one about which reasonable persons might well differ. The requirement for excludability of the disability payments was that petitioner, rather than his employer, Gaston Bouquett, M.D., Inc., made the payments on the disability policy. Petitioner's evidence that he made the payments was indirect and consisted mainly of his testimony that he reimbursed his controlled corporation by making cash deposits into the corporate account. He did not reimburse the corporation by check, and we specifically noted "Petitioner has not presented any direct evidence of any personal cash outlays for this purpose." In short, we found petitioner credible, and we believed him. A reasonable person might have come to the opposite conclusion about petitioner's credibility.

Section 7430(c)(4)(A) defines "prevailing party" as one "(i) which establishes that the position of the United States in the proceeding">*397 was not substantially justified." Although this Court disagreed with respondent, we do not find that her position "was not substantially justified". We find that respondent's position was justified. Having so decided, there is no need to consider the other requirements of section 7430. Petitioner's motion for administrative and litigation costs will be denied.

An appropriate order will be issued.

---

Footnotes

• 1. .↩

• 2. Secondary issues were conceded by respondent shortly after petitioner supplied necessary documentation subsequent to the appellate conference.↩