Dunaway v. Comm'r of Internal Revenue, No. 10542–03.
| Decision Date | 14 March 2005 |
| Docket Number | No. 10542–03. |
| Citation | 124 T.C. 80,124 T.C. No. 7 |
| Parties | John M. & Rebecca A. DUNAWAY, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent |
| Court | U.S. Tax Court |
124 T.C. 80
124 T.C. No. 7
John M. & Rebecca A. DUNAWAY, Petitioners
v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
No. 10542–03.
United States Tax Court.
March 14, 2005.
[124 T.C. 80]
Petitioners are pro se litigants.
Held: Under sec. 7430, I.R.C., petitioners are not entitled to recover as litigation costs any amounts representing the value of their research time.
Held, further, petitioners are entitled to recover as litigation costs out-of-pocket postage and delivery costs and their mileage costs and parking fees incurred to attend a court hearing.
John M. Dunaway and Rebecca A. Dunaway, pro se.
Thomas J. Travers and Aimee R. Lobo–Berg, for respondent.
This case is before us under section 7430 on petitioners' motion for litigation costs. Respondent determined a deficiency of $728 in petitioners' 2001 Federal income tax, which determination respondent has conceded.
Respondent agrees that his position in his notice of deficiency was not substantially justified and that petitioners are to be regarded herein as the prevailing party for purposes of the instant motion for litigation costs. Also, respondent has conceded that petitioners are entitled to recover $95.06 in litigation costs consisting of the $60 Court filing fee and $35.06 in postage and delivery costs.
The primary issues for decision are whether the pro se petitioners herein are entitled to recover as litigation costs: (1) Amounts representing the value of their research time and (2) additional out-of-pocket postage and delivery costs and out-of-pocket mileage costs and parking fees incurred by petitioner 1 to attend the Court hearing in this matter.
[124 T.C. 81]
Unless otherwise indicated, all section references are to the Internal Revenue Code as amended, and all Rule references are to the Tax Court Rules of Practice and Procedure.
BackgroundAt the time the petition was filed, petitioners resided in Meridian, Idaho.
Petitioners timely filed their 2001 joint Federal income tax return. On June 16, 2003, respondent mailed to petitioners the notice of deficiency.
On June 21, 2003, petitioners mailed to the Court by certified mail a three-page letter, which was filed by the Court as petitioners' petition (original petition). With the original petition, petitioners did not submit the $60 Court filing fee that was due. Rule 20(b). The envelope in which the original petition was mailed is in evidence, and a postage cost therefor of $4.65 is indicated on the envelope.
On August 26, 2003, petitioners mailed to the Court by certified mail an amended petition, in proper form, and included the $60 filing fee.
On or about March 19, 2004, after various communications with petitioners, 2 respondent conceded the $728 tax deficiency determined against petitioners, and petitioners mailed to respondent's Portland office by certified mail a letter in which petitioners set forth their claim for litigation costs.
On April 19, 2004, at a cost of $15.95, petitioners delivered to the Court via Federal Express their motion for an award of litigation costs with an attached expense report (original expense report). Therein, petitioners claimed costs of $60 for the Court filing fee, $66.29 for postage, delivery, and office supplies, $200 for lost wages, and $783 for the purported value of petitioners' research time.3
Also in April of 2004, at a cost of $13.77, petitioners delivered to respondent via Federal Express additional documents relating to their motion for litigation costs.
[124 T.C. 82]
On May 4, 2004, a hearing on petitioners' motion for litigation costs was held in Boise, Idaho. To attend the hearing, petitioner drove his car the 30–mile round trip from petitioners' home in Meridian to the courthouse in Boise, 4 and petitioner incurred $3 to park his car while attending the Court hearing. Petitioner's wife did not accompany petitioner to the courthouse and apparently went to work.
On June 8, 2004, petitioners mailed to the Court by certified mail a revised five-page expense report which claimed $10.50 relating to the automobile mileage costs to travel to the May 4, 2004, Court hearing 5 and $3 relating to the parking fee. The revised expense report also reflected a reduction to $88.96 for petitioner's lost wages,6 an increase to $158.64 for postage, delivery, and office supplies, and an increase to $1,248.90 relating to the purported value of petitioners' research time. 7
On September 28, 2004, petitioners also mailed to the Court by certified mail petitioners' reply to respondent's memorandum brief (petitioners' reply brief). The envelope in which petitioners' reply brief was mailed is in evidence, and a mailing cost of $4.42 is indicated thereon. We note that petitioners apparently did not serve upon respondent's counsel copies of any of the documents that petitioners submitted to the Court, and petitioners do not claim any postage or delivery costs relating to service copies.
Below is a schedule, by category, of petitioners' claimed litigation costs, reflecting the differing amounts petitioners claim in their original and in their revised expense reports:
+-----------------------------------------------------------------------------+
¦Type of Cost ¦Original Expense ¦Revised Expense ¦
¦ ¦Report ¦Report ¦
+----------------------------------+---------------------+--------------------¦
¦Court filing fee ¦$ 60.00 ¦$ 60.00 ¦
+----------------------------------+---------------------+--------------------¦
¦Research time ¦783.00 ¦1,248.90 ¦
+----------------------------------+---------------------+--------------------¦
¦Lost wages ¦200.00 ¦88.96 ¦
+----------------------------------+---------------------+--------------------¦
¦Postage, delivery, and office ¦66.29 ¦158.64 ¦
¦supplies ¦ ¦ ¦
+----------------------------------+---------------------+--------------------¦
¦Mileage ¦— ¦10.50 ¦
+----------------------------------+---------------------+--------------------¦
¦Parking ¦— ¦3.00 ¦
+----------------------------------+---------------------+--------------------¦
¦Total ¦$1,109.29 ¦$1,570.00 ¦
+-----------------------------------------------------------------------------+
[124 T.C. 83]
Discussion
A prevailing party may be awarded reasonable litigation costs incurred in connection with a case filed in this Court. Sec. 7430(a); Rule 230.
Respondent concedes that petitioners qualify as prevailing parties under the requirements of section 7430(c)(4) and that no limitation under section 7430(b) applies to preclude petitioners from qualifying for an award of litigation costs under section 7430(a). As stated above, respondent concedes that petitioners are entitled to an award of litigation costs of $60 for the Court filing fee and $35.06 for various postage and delivery costs.
Value Relating to Research TimePetitioners claim that they are entitled to recover as litigation costs under section 7430 $1,248.90 relating to the value of petitioners' research time.8
Respondent argues that petitioners are not entitled to recover anything for the value relating to petitioners' research time.
The courts have consistently held that under section 7430 pro se taxpayers may not be awarded an amount reflecting the value of their personal time in handling the litigation, even though fees taxpayers pay to attorneys to handle the litigation would be recoverable. See, e.g., Frisch v. Commissioner, 87 T.C. 838, 846–847, 1986 WL 22038 (1986) (pro se taxpayer, who also was an attorney, not entitled to the value of his time in handling the litigation). Petitioners are not entitled to an award under section 7430 with respect to the value or costs relating to petitioners' research time.
[124 T.C. 84]
Petitioners also argue that, at the least, they should be able to recover wages petitioner lost on May 4, 2004, the day of the Court hearing, a Monday on which petitioner would have worked had it not been necessary to attend the hearing. At the hearing, petitioner acknowledged that he had paid vacation leave available from his employer in order to attend the May 4, 2004, hearing, but that he was not planning to take such paid leave. The evidence does not indicate whether petitioner ultimately took paid leave, and we do not know whether petitioner actually lost any wages to attend the May 4, 2004, hearing. For lack of substantiation and without deciding the legal issue as to whether petitioner as a pro se litigant would have been entitled to recover as litigation costs an amount reflecting lost wages, we do not award petitioners herein litigation costs with respect to claimed lost wages.
Postage & Delivery CostsAs indicated, respondent concedes that petitioners, under section 7430, are entitled to recover a total of $35.06 in postage costs. Set forth in the schedule below for each mailing and delivery are the total amounts petitioners claim they are entitled to recover as postage and delivery costs...
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