Galedrige Construction, Inc., (1997)

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Galedrige Construction, Inc., (1997)

T.C. Memo. 1997-485

UNITED STATES TAX COURT GALEDRIGE CONSTRUCTION, INC., Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent Docket No. 21463-94. Filed October 28, 1997.

John P. McDonnell, for petitioner. Ronald G. Dong, for respondent.

MEMORANDUM OPINION PARR, Judge: This case is before the Court on petitioner's motion for reasonable litigation costs pursuant to section 74301 -2and Rule 231, filed June 24, 1997, and petitioner's amended motion, filed September 2, 1997.2 Petitioner's motion is for only the reasonable litigation costs it expended on the issue of whether it was liable for the addition to tax pursuant to section 6661 (the section 6661 issue) in Galedrige Construction, Inc. v. Commissioner, T.C. Memo. 1997-240 (Galedrige I).

The issues for decision are: (1) Whether respondent's determination of the section 6661 addition to tax for substantial understatement of tax was substantially justified within the meaning of section 7430(c)(4) and the regulations thereunder. We hold it was not. (2) Whether the amount of litigation costs claimed by petitioner is reasonable within the meaning of section 7430(c)(1). We hold it is.

-3-The relevant facts are taken from our opinion in Galedrige I, the parties' submissions, and the...

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