Cir
Knudsen v. Commissioner
Opinion
Opinion
Walter, J.
In this case, we are asked to decide whether a unilateral concession by the Internal Revenue Service (“IRS”) is a settlement, for purposes of the Qualified Offer Rule (“QOR”) of the Internal Revenue Code, codified at 26 U.S.C. § 7430 (e)(4)(E). We conclude that this concession was not a settlement, within the meaning of .the QOR. Accordingly, we reverse the decision of the United States Tax Court and remand the case for a determination of reasonable attorney’s fees and costs to be awarded to the taxpayer, as the prevailing party.
I. FACTUAL AND PROCEDURAL HISTORY
The relevant facts are not in dispute. Barbara Jane Knudsen and Kurt H. Knudsen married in 1979, separated in 2006, and divorced in 2008. During the years 1998-2001, the Knudsens filed joint tax returns. Barbara was a “stay-at-home mom,” earning no income of her own, and Kurt was a practicing attorney. Despite their having filed joint tax returns for those four years, the taxes were never paid, and the Knudsens became jointly and •severally liable for the respective tax liabilities.
In June 2005, the IRS sent the Knud-sens separate notices of intent to levy with respect to underpayments of the taxes reported…