Berks v. U.S., 86-5293
| Decision Date | 06 August 1987 |
| Docket Number | No. 86-5293,86-5293 |
| Citation | 825 F.2d 1262 |
| Parties | -5455, 87-2 USTC P 9545 David N. BERKS, Appellant, v. UNITED STATES of America, Samuel K. Spaise, Appellees. |
| Court | U.S. Court of Appeals — Eighth Circuit |
Jay B. Kelly, Minneapolis, Minn., for appellant.
Laurie A. Snyder, Washington, D.C., for appellees.
Before HEANEY, BOWMAN, and MAGILL, Circuit Judges.
The sole issue in this appeal is whether the district court erred in denying plaintiff-appellant David N. Berks' motion for litigation costs and attorney's fees under 26 U.S.C. Sec. 7430. We remand the case to the district court for further findings.
The underlying cause of action in this case involved a claim by Berks for a refund of taxes paid pursuant to an assessment by the Internal Revenue Service ("IRS") under 26 U.S.C. Sec. 6672. Berks instituted the suit after the IRS administratively denied his request for an abatement of the assessment. Following a five day trial, a jury returned a verdict in favor of Berks and against the government. This verdict has not been challenged. Subsequent to trial, the district court entered an order denying Berks' motion for litigation costs and attorney's fees under 26 U.S.C. Sec. 7430. Berks appeals from this order.
Under section 7430, a "prevailing party" may be awarded a judgment for reasonable litigation costs incurred in a civil proceeding in federal court for a refund of taxes if the party substantially prevails and establishes that the position of the United States in the civil proceeding was unreasonable. See 26 U.S.C. Sec. 7430(c)(2)(A)(i), (ii). In ruling on Berks' motion, the court noted that the parties did not dispute that Berks was a "prevailing party" under subsection 7430(c)(2)(A)(ii). The court denied Berks' motion on the ground that the United States' position in the civil proceedings was not unreasonable:
While the court could easily find that the position of the United States in the administrative proceedings involving Berks was unreasonable, the court cannot similarly find that the position of the United States in the civil proceeding was unreasonable. Upon review of the civil proceeding, the court cannot say that the position of the United States was unreasonable.
This court, in reviewing the district court's denial of fees and costs, is limited to examining whether the court abused its discretion. In this case, whether the court abused its discretion...
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