Rudolph L. Bertolino v. Commissioner Internal Revenue Service

Rudolph L. Bertolino sought attorneys fees from the government under Internal Revenue Code § 7430. The Tax Court denied the request. We affirm the Tax Court.

FACTS

Bertolino filed his federal income tax return for 1985, in which he claimed a net operating loss carryover of $38,102.42 and long term capital gain deductions. The return reported taxable income of $6,243.22 and income tax due of $482 which was offset by a general business credit. Berto-lino did not file a computation of the alternative minimum tax. The Internal Revenue Service returned to Bertolino federal withholdings of $2,793.25.

Upon examination, the Service determined an increase in Bertolino’s tax based on its computation of the alternative mini mum tax in which it treated the net operating loss as items of tax preference and disallowed the capital gains deduction.

Bertolino’s counsel wrote to the Service on April 29, 1987 complaining that the Service had erroneously added to the minimum taxable income the net operating loss deduction of $38,102.42. The Service did not reply. Counsel again wrote the Service on October 6, 1987, pointing out that Bertoli-no’s tax returns for the prior years showed the Service’s…