McIntosh

MEMORANDUM **

Taxpayers (Greg and Sheila McIntosh) appeal the order of the United States Tax Court denying their motion for an award of administrative and litigation costs pursuant to 26 U.S.C. § 7430 . We review the denial of administrative and litigation costs for abuse of discretion. In re Yochum, 89 F.3d 661, 670 (9th Cir.1996).

As the prevailing party in an action to collect taxes, the Taxpayers are entitled to their reasonable costs unless the United States was “substantially justified” in its position. 26 U.S.C. § 7430 (a), (c). “Substantially justified” means “justified to a degree that could satisfy a reasonable person,” Pierce v. Underwood, 487 U.S. 552, 565 , 108 S.Ct. 2541 , 101 L.Ed.2d 490 (1988), and that has a basis in both law and fact, Marlar, Inc. v. United States, 151 F.3d 962, 970 (9th Cir.1998). However, the Taxpayers still bear the initial burden of proving their entitlement to any claimed deductions. Smith v. Comm’r, 300 F.3d 1023, 1029 (9th Cir.2002). The Internal Revenue Service (“IRS”) may not only reasonably oppose Taxpayers’ position until they provide substantiation for their claimed deductions, see, e.g., Mattingly v. United States, 939 F.2d 816,…