PUBLIC LAW 100-647—NOV. 10,1988 102 STAT. 3745

"(B) expenses, costs, and fees described in paragraph
(1KB), except that any determination made by the court

under clause (ii) or (ill) thereof shall be made by the
Internal Revenue Service in cases where the determination
under paragraph (4KB) of the awarding of reasonable

administrative costs is made by the Internal Revenue Serv-
ice.

Such term shall only include costs incurred on or after the
earlier of (i) die 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.

"(3) ATTORNEY'S FEES.—For purposes of paragraphs (1) and (2),
fees for the services of an individual (whether or not an attor-
ney) 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.
"(4) PREVAILING PARTY.—

"(A) IN GENERAL.—The term 'prevailing party' means any
party in any proceeding to which subsection (a) applies
(other than the United States or any creditor of the tax-
payer involved)—

"(i) which establishes that the position of the United
States in the proceeding was not substantially justified.
"(H) which—

"(I) has substantially prevailed with respect to
the amount in controversy, or

"(ED has substantially prevailed with respect to
the most significant issue or set of issues presented,
and

"(Hi) which meets the requirements of the 1st sen-
tence of section 2412(dXlXB) of title 28, United States
Code (as in effect on October 22, 1986) except to the
extent differing procedures are established by rule of
court and meets the requirements of section
2412(dX2XB) of such title 28 (as so in effect).

"(B) DETERMINATION AS TO PREVAILING PARTY.—Any

determination under subparagraph (A) as to whether a
party is a prevailing party shall be made by agreement of
the parties or—

"(i) in the case where the final determination with
respect to the tax, interest, or penalty is made at the
administrative level, by the Internal Revenue Service,
or

"(ii) in the case where such final determination is
made by a court, the court.

"(5) ADMINISTRATIVE PROCEEDINGS.—The term "administrative
proceeding* means any procedure or other action before the
Internal Revenue Service.

"(6) COURT PROCEEDINGS.—The term 'court proceeding' means
any civil action brought in a court of the United States (includ-
ing the Tax Court and the United States Claims Court).

r'(7) POSITION OF UNITED STATES.—The term "position of the
United States' means—

"(A) the position taken by the United States in a judicial
proceeding to which subsection (a) applies, and

"(B) the position taken in an administrative proceeding to
which subsection (a) applies as of the earlier of—