Internal Revenue Code · 26 U.S.C.
§ 7430. Awarding of costs and certain fees
Official text, no changes From the Office of the Law Revision Counsel, release point 119-121 (current through Public Law 119-121 (October 9, 2026)). Compare it with the official text at uscode.house.gov (external site).
Cite as 26 U.S.C. § 7430
At a glance
Read from the text, the source credit and the official notes. Not part of the law.
- Status
- In force
- Added
- September 3, 1982 by Pub. L. 97–248
- Last amended
- July 1, 2019 by Pub. L. 116–25
- Amendments
- 10 dated changes in the source credit
- Length
- 7 subsections · 2,416 words · about 11 min to read
- Defines
- 9 terms
- Cross-references
- cites 3; cited by 8 Code sections and 5 other regulations
- Regulations
- 9 issued under this section
A judgment for reasonable litigation costs shall not be awarded under subsection (a) in any court proceeding unless the court determines that the prevailing party has exhausted the administrative remedies available to such party within the Internal Revenue Service. Any failure to agree to an extension of the time for the assessment of any tax shall not be taken into account for purposes of determining whether the prevailing party meets the requirements of the preceding sentence.
No award for reasonable litigation and administrative costs may be made under subsection (a) with respect to any portion of the administrative or court proceeding during which the prevailing party has unreasonably protracted such proceeding.
An award may be made under subsection (a) by the Internal Revenue Service for reasonable administrative costs only if the prevailing party files an application with the Internal Revenue Service for such costs before the 91st day after the date on which the final decision of the Internal Revenue Service as to the determination of the tax, interest, or penalty is mailed to such party.
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.
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 circumstances) 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.
For purposes of clause (i), the position of the United States shall be presumed not to be substantially justified if the Internal Revenue Service did not follow its applicable published guidance in the administrative proceeding. Such presumption may be rebutted.
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.
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).
This subparagraph shall not apply to a party which is a prevailing party under any other provision of this paragraph.
The term “administrative proceeding” means any procedure or other action before the Internal Revenue Service.
The term “court proceeding” means any civil action brought in a court of the United States (including the Tax Court and the United States Court of Federal Claims).
An award for reasonable administrative costs shall be payable out of funds appropriated under section 1304 of title 31, United States Code.
An award for reasonable litigation costs shall be payable in the case of the Tax Court in the same manner as such an award by a district court.
An order granting or denying (in whole or in part) an award for reasonable litigation or administrative costs under subsection (a) in a court proceeding, may be incorporated as a part of the decision or judgment in the court proceeding and shall be subject to appeal in the same manner as the decision or judgment.
A decision granting or denying (in whole or in part) an award for reasonable administrative costs under subsection (a) by the Internal Revenue Service shall be subject to the filing of a petition for review with the Tax Court under rules similar to the rules under section 7463 (without regard to the amount in dispute). If the Secretary sends by certified or registered mail a notice of such decision to the petitioner, no proceeding in the Tax Court may be initiated under this paragraph unless such petition is filed before the 91st day after the date of such mailing.
An order of the Tax Court disposing of a petition under paragraph (2) shall be reviewable in the same manner as a decision of the Tax Court, but only with respect to the matters determined in such order.
(Added Pub. L. 97–248, title II, § 292(a), Sept. 3, 1982, 96 Stat. 572; amended Pub. L. 98–369, div. A, title VII, § 714(c), July 18, 1984, 98 Stat. 961; Pub. L. 99–514, title XV, § 1551(a)–(g), Oct. 22, 1986, 100 Stat. 2752, 2753; Pub. L. 100–647, title I, § 1015(i), title VI, § 6239(a), Nov. 10, 1988, 102 Stat. 3571, 3743; Pub. L. 104–168, title VII, §§ 701(a)–(c)(2), 702(a), 703(a), 704(a), July 30, 1996, 110 Stat. 1463, 1464; Pub. L. 105–34, title XII, § 1285(a)–(c), title XIV, § 1453(a), Aug. 5, 1997, 111 Stat. 1038, 1055; Pub. L. 105–206, title III, § 3101(a)–(e), title VI, §§ 6012(h), 6014(e), July 22, 1998, 112 Stat. 727, 728, 819, 820; Pub. L. 106–554, § 1(a)(7) [title III, § 319(25)], Dec. 21, 2000, 114 Stat. 2763, 2763A–647; Pub. L. 115–97, title I, § 11002(d)(1)(SS), Dec. 22, 2017, 131 Stat. 2061; Pub. L. 115–141, div. U, title IV, § 401(a)(325)(A), Mar. 23, 2018, 132 Stat. 1199; Pub. L. 116–25, title I, § 1001(b)(1)(H), (2), July 1, 2019, 133 Stat. 985.)
Terms defined here
Where the text says “the term … means”. Select a term to jump to its definition.
- administrative proceeding § 7430(c)(5)
- applicable published guidance § 7430(c)(4)(B)(iv)
- court proceeding § 7430(c)(6)
- position of the United States § 7430(c)(7)
- prevailing party § 7430(c)(4)(A)
- qualified offer § 7430(g)(1)
- qualified offer period § 7430(g)(2)
- reasonable administrative costs § 7430(c)(2)
- reasonable litigation costs § 7430(c)(1)
Regulations under this section
Treasury regulations (26 CFR) issued under § 7430
- § 301.7430-0 Table of contents.
- § 301.7430-1 Exhaustion of administrative remedies.
- § 301.7430-2 Requirements and procedures for recovery of reasonable administrative costs.
- § 301.7430-3 Administrative proceeding and administrative proceeding date.
- § 301.7430-4 Reasonable administrative costs.
- § 301.7430-5 Prevailing party.
- § 301.7430-6 Effective/applicability dates.
- § 301.7430-7 Qualified offers.
- § 301.7430-8 Administrative costs incurred in damage actions for violations of section 362 or 524 of the Bankruptcy Code.
Cross-references
Computed from the citations in the text of Title 26 and 26 CFR.
This section cites 3 other sections
- § 1(f)(3) Tax imposed
- § 6110(f) Public inspection of written determinations
- § 7463 Disputes involving $50,000 or less
Cited by 8 Code sections
- § 6404(h)(1) Abatements
- § 6512(c)(2) Limitations in case of petition to Tax Court
- § 6656(c)(1) Failure to make deposit of taxes
- § 7431(c)(3) Civil damages for unauthorized inspection or disclosure of returns and return information
- § 7433(e)(2)(B)(i) Civil damages for certain unauthorized collection actions
- § 7436(d)(2) Proceedings for determination of employment status
- § 7491(a)(2)(C) Burden of proof
- § 7611(g) Restrictions on church tax inquiries and examinations
Cited in 5 regulations not issued under it
- § 301.6656-1 Abatement of penalty.
- § 301.7432-1 Civil cause of action for failure to release a lien.
- § 301.7433-1 Civil cause of action for certain unauthorized collection actions.
- § 301.7433-2 Civil cause of action for violation of section 362 or 524 of the Bankruptcy Code.
- § 301.7803-2 Internal Revenue Service Independent Office of Appeals resolution of Federal tax controversies without litigation.
Amendment history
From the source credit and the official notes, newest first.
- Amended by Pub. L. 116–25
- Amended by Pub. L. 115–141Parts changed in 2018: (c)(6)
- Amended by Pub. L. 115–97Parts changed in 2017: (c)(1)
- Amended by Pub. L. 106–554Parts changed in 2000: (c)(3) (c)(3)(B)
- Amended by Pub. L. 105–206Parts changed in 1998: (b)(4) (c)(1)(B)(iii) (c)(2) (c)(3) (c)(4)(B)(iii) (c)(4)(D) (c)(4)(E) (g)
- Amended by Pub. L. 105–34Parts changed in 1997: (b)(5) (c)(4)(D) (f)(2) (f)(3)
- Amended by Pub. L. 104–168Parts changed in 1996: (b)(1) (b)(3) (c)(1) (c)(1)(B)(iii) (c)(2)(B) (c)(4)(A) (c)(4)(B) (c)(4)(C)
- Amended by Pub. L. 100–647Parts changed in 1988: (c)(2)(A)(iii)
- Amended by Pub. L. 99–514Parts changed in 1986: (a) (b) (c)(1)(A) (c)(2)(A) (c)(4) (f)
- Amended by Pub. L. 98–369Parts changed in 1984: (a)(2)
- Added by Pub. L. 97–248
Where it sits in the Code
- Subtitle F Procedure and Administration
- Chapter 76 JUDICIAL PROCEEDINGS
- Subchapter B Proceedings by Taxpayers and Third Parties
Nearby sections
- § 7426 Civil actions by persons other than taxpayers
- § 7427 Tax return preparers
- § 7428 Declaratory judgments relating to status and classification of organizations under section 501(c)(3), etc.
- § 7429 Review of jeopardy levy or assessment procedures
- § 7430 Awarding of costs and certain fees
- § 7431 Civil damages for unauthorized inspection or disclosure of returns and return information
- § 7432 Civil damages for failure to release lien
- § 7433 Civil damages for certain unauthorized collection actions
- § 7433A Civil damages for certain unauthorized collection actions by persons performing services under qualified tax collection contracts
Official notes
Show the Law Revision Counsel's notes (amendments, effective dates)
Inflation Adjusted Items for Certain Years
For inflation adjustment of certain items in this section, see Revenue Procedures listed in a table under section 1 of this title.
Editorial Notes
Prior Provisions
A prior section 7430 was renumbered section 7437 of this title.
Amendments
2019—Pub. L. 116–25 substituted “Internal Revenue Service Independent Office of Appeals” for “Internal Revenue Service Office of Appeals” wherever appearing.
2018—Subsec. (c)(6). Pub. L. 115–141 substituted “United States Court of Federal Claims” for “United States Claims Court”.
2017—Subsec. (c)(1). Pub. L. 115–97 substituted “for ‘calendar year 2016’ in subparagraph (A)(ii)” for “for ‘calendar year 1992’ in subparagraph (B)” in concluding provisions.
2000—Subsec. (c)(3). Pub. L. 106–554, § 1(a)(7) [title III, § 319(25)(A)], substituted “Attorneys’ ” for “Attorneys” in heading.
Subsec. (c)(3)(B). Pub. L. 106–554, § 1(a)(7) [title III, § 319(25)(B)], substituted “attorneys’ fees” for “attorneys fees” wherever appearing.
1998—Subsec. (b)(4), (5). Pub. L. 105–206, § 6012(h), redesignated par. (5) as (4).
Subsec. (c)(1)(B)(iii). Pub. L. 105–206, § 3101(a), substituted “$125” for “$110” and inserted “the difficulty of the issues presented in the case, or the local availability of tax expertise,” before “justifies a higher rate”.
Subsec. (c)(2). Pub. L. 105–206, § 3101(b), added concluding provisions and struck out former concluding provisions which read as follows: “Such term shall only include costs incurred on or after the earlier of (i) the date of the receipt by the taxpayer of the notice of the decision of the Internal Revenue Service Office of Appeals, or (ii) the date of the notice of deficiency.”
Subsec. (c)(3). Pub. L. 105–206, § 3101(c), substituted “attorneys” for “attorney’s” in heading and amended text of par. (3) generally. Prior to amendment, text read as follows: “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.”
Subsec. (c)(4)(B)(iii), (iv). Pub. L. 105–206, § 3101(d), added cl. (iii) and redesignated former cl. (iii) as (iv).
Subsec. (c)(4)(D). Pub. L. 105–206, § 6014(e), substituted “subparagraph (A)(ii)” for “subparagraph (A)(iii)” in introductory provisions.
Subsec. (c)(4)(E). Pub. L. 105–206, § 3101(e)(1), added subpar. (E).
Subsec. (g). Pub. L. 105–206, § 3101(e)(2), added subsec. (g).
1997—Subsec. (b)(5). Pub. L. 105–34, § 1285(b), added par. (5).
Subsec. (c)(4)(D). Pub. L. 105–34, § 1453(a), added subpar. (D).
Subsec. (f)(2). Pub. L. 105–34, § 1285(c), substituted “the filing of a petition for review with” for “appeal to” and inserted at end “If the Secretary sends by certified or registered mail a notice of such decision to the petitioner, no proceeding in the Tax Court may be initiated under this paragraph unless such petition is filed before the 91st day after the date of such mailing.”
Subsec. (f)(3). Pub. L. 105–34, § 1285(a), added par. (3).
1996—Subsec. (b)(1). Pub. L. 104–168, § 703(a), inserted at end “Any failure to agree to an extension of the time for the assessment of any tax shall not be taken into account for purposes of determining whether the prevailing party meets the requirements of the preceding sentence.”
Subsec. (b)(3), (4). Pub. L. 104–168, § 704(a), redesignated par. (4) as (3) and struck out former par. (3) which read as follows:
“(3) Exclusion of declaratory judgment proceedings.—
“(A) In general.—No award for reasonable litigation costs may be made under subsection (a) with respect to any declaratory judgment proceeding.
“(B) Exception for section 501(c)(3) determination revocation proceedings.—Subparagraph (A) shall not apply to any proceeding which involves the revocation of a determination that the organization is described in section 501(c)(3).”
Subsec. (c)(1). Pub. L. 104–168, § 702(a)(3), inserted closing provisions “In the case of any calendar year beginning after 1996, the dollar amount referred to in clause (iii) shall be increased by an amount equal to such dollar amount multiplied by the cost-of-living adjustment determined under section 1(f)(3) for such calendar year, by substituting ‘calendar year 1995’ for ‘calendar year 1992’ in subparagraph (B) thereof. If any dollar amount after being increased under the preceding sentence is not a multiple of $10, such dollar amount shall be rounded to the nearest multiple of $10.”
Subsec. (c)(1)(B)(iii). Pub. L. 104–168, § 702(a)(1), (2), substituted “$110” for “$75” and struck out “an increase in the cost of living or” before “a special factor,”.
Subsec. (c)(2)(B). Pub. L. 104–168, § 701(c)(1), substituted “paragraph (4)(C)” for “paragraph (4)(B)”.
Subsec. (c)(4)(A). Pub. L. 104–168, § 701(a), redesignated cls. (ii) and (iii) as (i) and (ii), respectively, and struck out former cl. (i) which read as follows: “which establishes that the position of the United States in the proceeding was not substantially justified,”.
Subsec. (c)(4)(B). Pub. L. 104–168, § 701(b), added subpar. (B). Former subpar. (B) redesignated (C).
Subsec. (c)(4)(C). Pub. L. 104–168, § 701(c)(2), substituted “Any determination under this paragraph” for “Any determination under subparagraph (A)”.
Pub. L. 104–168, § 701(b), redesignated subpar. (B) as (C).
1988—Pub. L. 100–647, § 6239(a), substituted “costs” for “court costs” in section catchline and amended text generally, revising and restating provisions so as to include costs and fees in administrative proceedings.
Subsec. (c)(2)(A)(iii). Pub. L. 100–647, § 1015(i), amended cl. (iii) generally. Prior to amendment, cl. (iii) read as follows: “meets the requirements of section 504(b)(1)(B) of title 5, United States Code (as in effect on the date of the enactment of the Tax Reform Act of 1986 and applied by taking into account the commencement of the proceeding described in subsection (a) in lieu of the initiation of the adjudication referred to in such section).”
1986—Subsec. (a). Pub. L. 99–514, § 1551(f), inserted “(payable in the case of the Tax Court in the same manner as such an award by a district court)” in concluding provisions.
Subsec. (b). Pub. L. 99–514, § 1551(a), (b), redesignated pars. (2) to (4) as (1) to (3), respectively, added par. (4), and struck out former par. (1), maximum dollar amount, which read as follows: “The amount of reasonable litigation costs which may be awarded under subsection (a) with respect to any prevailing party in any civil proceeding shall not exceed $25,000.”
Subsec. (c)(1)(A). Pub. L. 99–514, § 1551(c), amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “The term ‘reasonable litigation costs’ includes—
“(i) reasonable court costs,
“(ii) the reasonable expenses of expert witnesses in connection with the civil proceeding,
“(iii) the reasonable cost of any study, analysis, engineering report, test, or project which is found by the court to be necessary for the preparation of the party’s case, and
“(iv) reasonable fees paid or incurred for the services of attorneys in connection with the civil proceeding.”
Subsec. (c)(2)(A). Pub. L. 99–514, § 1551(d), substituted “was not substantially justified” for “was unreasonable” in cl. (i), and added cl. (iii).
Subsec. (c)(4). Pub. L. 99–514, § 1551(e), added par. (4).
Subsec. (f). Pub. L. 99–514, § 1551(g), struck out subsec. (f), termination, which read as follows: “This section shall not apply to any proceeding commenced after December 31, 1985.”
1984—Subsec. (a)(2). Pub. L. 98–369 inserted reference to United States Claims Court.
Statutory Notes and Related Subsidiaries
Effective Date of 2017 Amendment
Amendment by Pub. L. 115–97 applicable to taxable years beginning after Dec. 31, 2017, see section 11002(e) of Pub. L. 115–97, set out as a note under section 1 of this title.
Effective Date of 1998 Amendment
Pub. L. 105–206, title III, § 3101(g), July 22, 1998, 112 Stat. 729, provided that: “The amendments made by this section [amending this section and section 7431 of this title] shall apply to costs incurred (and, in the case of the amendment made by subsection (c) [amending this section], services performed) more than 180 days after the date of the enactment of this Act [July 22, 1998].”
Amendment by sections 6012(h) and 6014(e) of Pub. L. 105–206 effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997, Pub. L. 105–34, to which such amendment relates, see section 6024 of Pub. L. 105–206, set out as a note under section 1 of this title.
Effective Date of 1997 Amendment
Pub. L. 105–34, title XII, § 1285(d), Aug. 5, 1997, 111 Stat. 1039, provided that: “The amendments made by this section [amending this section] shall apply to civil actions or proceedings commenced after the date of the enactment of this Act [Aug. 5, 1997].”
Pub. L. 105–34, title XIV, § 1453(b), Aug. 5, 1997, 111 Stat. 1055, provided that: “The amendment made by this section [amending this section] shall apply to proceedings commenced after the date of the enactment of this Act [Aug. 5, 1997].”
Effective Date of 1996 Amendment
Amendment by section 701(a)–(c)(2) of Pub. L. 104–168 applicable in case of proceedings commenced after July 30, 1996, see section 701(d) of Pub. L. 104–168, set out as a note under section 6404 of this title.
Pub. L. 104–168, title VII, § 702(b), July 30, 1996, 110 Stat. 1464, provided that: “The amendment made by this section [amending this section] shall apply in the case of proceedings commenced after the date of the enactment of this Act [July 30, 1996].”
Pub. L. 104–168, title VII, § 703(b), July 30, 1996, 110 Stat. 1464, provided that: “The amendment made by this section [amending this section] shall apply in the case of proceedings commenced after the date of the enactment of this Act [July 30, 1996].”
Pub. L. 104–168, title VII, § 704(b), July 30, 1996, 110 Stat. 1464, provided that: “The amendment made by this section [amending this section] shall apply in the case of proceedings commenced after the date of the enactment of this Act [July 30, 1996].”
Effective Date of 1988 Amendment
Amendment by section 1015(i) of Pub. L. 100–647 effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986, Pub. L. 99–514, to which such amendment relates, see section 1019(a) of Pub. L. 100–647, set out as a note under section 1 of this title.
Pub. L. 100–647, title VI, § 6239(d), Nov. 10, 1988, 102 Stat. 3746, provided that: “The amendments made by this section [amending this section and section 504 of Title 5, Government Organization and Employees] shall apply to proceedings commencing after the date of the enactment of this Act [Nov. 10, 1988].”
Effective Date of 1986 Amendment
Pub. L. 99–514, title XV, § 1551(h), Oct. 22, 1986, 100 Stat. 2753, provided that:
“(1) General rule.— Except as provided in paragraph (2), the amendments made by this section [amending this section] shall apply to amounts paid after September 30, 1986, in civil actions or proceedings, commenced after December 31, 1985.“(2) Subsection (f).— The amendment made by subsection (f) [amending this section] shall take effect as if included in the amendments made by section 292 of the Tax Equity and Fiscal Responsibility Act of 1982 [see Effective Date note below].“(3) Applicability of amendments to certain prior cases.— The amendments made by this section shall apply to any case commenced after December 31, 1985, and finally disposed of before the date of the enactment of this Act [Oct. 22, 1986], except that in any such case, the 30-day period referred to in section 2412(d)(1)(B) of title 28, United States Code, or Rule 231 of the Tax Court, as the case may be, shall be deemed to commence on the date of the enactment of this Act [Oct. 22, 1986].”
Effective Date of 1984 Amendment
Amendment by Pub. L. 98–369 effective as if included in the provision of the Tax Equity and Fiscal Responsibility Act of 1982, Pub. L. 97–248, to which such amendment relates, see section 715 of Pub. L. 98–369, set out as a note under section 31 of this title.
Effective Date
Pub. L. 97–248, title II, § 292(e), Sept. 3, 1982, 96 Stat. 574, as amended by Pub. L. 98–369, div. A, title I, § 160, July 18, 1984, 98 Stat. 696, provided that:
“(1) In general.— The amendments made by this section [enacting this section and amending section 6673 of this title and section 2412 of Title 28, Judiciary and Judicial Procedure] shall apply to civil actions or proceedings commenced after February 28, 1983.“(2) Penalty.— The amendments made by subsections (b) and (d)(2) [amending section 6673 of this title] shall apply to any action or proceeding in the United States Tax Court which—“(A) is commenced after December 31, 1982, or“(B) is pending in the United States Tax Court on the day which is 120 days after the date of the enactment of the Tax Reform Act of 1984 [July 18, 1984].”