112 STAT. 728 PUBLIC LAW 105-206-^ULY 22, 1998 "the difficulty of the issues presented in the case, or the local availability of tax expertise," before "justifies a higher rate". (b) AWARD OF ADMINISTRATIVE COSTS INCURRED AFTER 30- DAY LETTER. —Paragraph (2) of section 7430(c) is amended by striking the last sentence and inserting the following new flush sentence: "Such term shall only include costs incurred on or after whichever of the following is the earliest: (i) the date of the receipt by the taxpayer of the notice of the decision of the Internal Revenue Service Office of Appeals; (ii) the date of the notice of deficiency; or (iii) the date on which the first letter of proposed deficiency which allows the taxpayer an opportunity for administrative review in the Internal Revenue Service Office of Appeals is sent.". (c) AWARD OF FEES FOR CERTAIN ADDITIONAL SERVICES. — Paragraph (3) of section 7430(c) is amended to read as follows: " (3) ATTORNEYS FEES.— " (A) IN GENERAL.—For purposes of paragraphs (1) and (2), fees for the services of an individual (whether or not an attorney) who is authorized to practice before the Tax Court or before the Internal Revenue Service shall be treated as fees for the services of an attorney. "(B) PRO BONO SERVICES.— The court may award reasonable attorneys fees under subsection (a) in excess of the attorneys fees paid or incurred if such fees are less than the reasonable attorneys fees because an individual is representing the prevailing party for no fee or for a fee which (taking into account all the facts and cir- Applicability. cumstances) is no more than a nominal fee. This subparagraph shall apply only if such award is paid to such individual or such individual's employer.". (d) DETERMINATION OF WHETHER POSITION OF UNITED STATES Is SUBSTANTIALLY JUSTIFIED. —Subparagraph (B) of section 7430(c)(4) is amended by redesignating clause (iii) as clause (iv) and by inserting after clause (ii) the following new clause: "(iii) EFFECT OF LOSING ON SUBSTANTIALLY SIMILAR ISSUES. —In determining for purposes of clause (i) whether the position of the United States was substantially justified, the court shall take into account whether the United States has lost in courts of appeal for other circuits on substantially similar issues.". (e) TAXPAYER TREATED AS PREVAILING IF JUDGMENT Is LESS THAN TAXPAYER'S OFFER. — (1) IN GENERAL.— Section 7430(c)(4) (defining prevailing party) is amended by adding at the end the following new subparagraph: "(E) SPECIAL RULES WHERE JUDGMENT LESS THAN TAXPAYER'S OFFER. — "(i) IN GENERAL.—^A party to a court proceeding meeting the requirements of subparagraph (A)(ii) shall be treated as the prevailing party if the liability of the taxpayer pursuant to the judgment in the proceeding (determined without regard to interest) is equal to or less than the liability of the taxpayer which would have been so determined if the United States had accepted a qualified offer of the party under subsection (g).
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