UNITED STATES TAX COURT-Continued
ment. Estate of Mueller v. Commissioner, 101 T.C. 551, applied.
Estate of Bartels v. Commissioner
Motion for Award of Reasonable Litigation Costs-
Commissioner's Project Challenging Reasonableness of
Actuarial Standards for Contributions to Defined Benefit
Plans-Substantially Justified in Awaiting Results of Lead
Case Before Conceding.-In one of many cases arising from
Commissioner's actuarial project involving
project involving reasonableness of
actuarial assumptions in connection with deductions for contribu-
tions to defined benefit pension plans, petitioner corporation moved
for award of litigation costs under sec. 7430; statutory deficiency
notice was issued on July 22, 1991; petition was filed on Sept. 30,
1991; multiple Courts of Appeals affirmed decisions adverse to
Commissioner's position in lead actuarial cases between 1993 and
1995; time for filing petition for writ of certiorari to Supreme Court
in one of lead cases expired on June 7, 1995; Commissioner con-
ceded underlying actuarial issues in full in June 14, 1995, letter to
petitioner; and Court filed parties' settlement stipulation on July
18, 1995, with decision of no deficiency in income tax and no addi-
tions to tax, Court determined Commissioner's position was
substantially justified, since Commissioner's decision to await out-
come of appeal of lead cases had merit and Commissioner moved
promptly afterwards in conceding petitioner's case; and Court
denied petitioner's motion for award of litigation costs. Paul Frehe
Enters., Inc. v. Commissioner
Motion for Award of Reasonable Litigation Costs-Net
Worth Measured by Asset Acquisition Costs-Effect of Fail-
ure To Request Appeals Office Conference.-Where petitioners
filed Rule 231 motion for award of sec. 7430 reasonable litigation
costs claiming Commissioner had not been substantially justified in
determining (1) sec. 4975 prohibited transactions had occurred with
respect to domestic international sales corporation, foreign sales
corporation, and two individual retirement accounts, and (2) sale of
petitioners' Illinois residence to closely held corporation was sham
transaction; and, although petitioners had agreed to extend period
of limitations until June 30, 1992, petitioners did not receive 30-day
letter before notice of deficiency dated June 29, 1992, determining
deficiencies and additions to tax for 1986 and 1988-90 taxable
years, Court determined Commissioner's litigation position, which
dated from filing of answer, was not substantially justified under
sec. 4975(c)(1)(E) as to prohibited transaction issue, and petitioners
were entitled to award under sec. 7430, but Commissioner was
justified as to sham sale transaction; each petitioner satisfied $2
million net worth limitation requirement of sec. 7430(c)(4)(a)(iii) as
of date of filing petition, since assets were valued according to
acquisition cost rather than fair market value; petitioners
exhausted administrative remedies for sec. 7430(a) purposes, since