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indubitably hamper petitioners' presentation of their case at trial, misfortunes of this type are not unique to petitioners. Any witness might move away or unexpectedly become unavailable. Every witness finds his or her memory of the events in question a little faded by the time the case comes to trial. While we sympathize with petitioners' position, their application has failed to convince us that their position warrants the special protection of Rule 82.

Petitioners urge us to adopt the test applied by the U.S. District Court for the southern division of the District of Maine in In re Hawkins, an unreported case (D. Me. 1973, 32 AFTR 2d 73-5120, 73-2 USTC par. 9483). In Hawkins, the court issued an order to take depositions pursuant to rule 27(b) Fed. R. Civ. P., stating that:

It is now well established, however, that a showing that the petitioner is presently unable to bring the expected action or to cause it to be brought is a sufficient showing of the danger of a loss of evidence by delay and that the right to perpetuate testimony does not depend upon the condition of the witness but on the situation of the petitioner and his right to bring an immediate action. [32 AFTR 2d at 73-5121, 73-2 USTC, par. 9483, at 81,523-81,524.]

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We decline to adopt this view because it is so expansive as to make Rule 82 meaningless. If an applicant need only show that, through no fault of his own, the case had not commenced, Rule 82 would grant orders to any individual who was contemplating a lawsuit, allowing him to garner depositions in the event a suit might one day be joined. The relief provided for by Rule 82 is an extraordinary measure and invoked only to prevent the failure or delay of justice. We will continue to apply the test of Gale East, Inc. v. Commissioner, supra, which requires that the applicant show that the testimony will, in all probability, be lost before trial.

Petitioners here are not without alternative remedies. They are free to use the full panoply of discovery provisions once a petition has been filed. Furthermore, if either of the physicians, whose depositions they seek today, becomes ill or imperiled, petitioners may reapply for an order under Rule 82 and show that there is a substantial risk that the testimony would be unavailable for trial.

In light of the foregoing discussion,

An appropriate order will be entered.

VIRGIL M. WHITESELL AND LOIS WHITESELL,
PETITIONERS v. COMMISSIONER OF
INTERNAL REVENUE, RESPONDENT

Docket Nos. 29402-82, 9885-83. Filed April 18, 1988.

After reaching a settlement agreement, petitioners moved for an award of litigation costs. Held, Court without authority to award litigation costs in a case, filed before the effective date of sec. 7430, I.R.C. 1954, that was consolidated with a case filed after that effective date. Held, further, respondent's position on statute of limitations issue reasonable. Held, further, respondent's assertion of fraud was reasonable when record reveals indicia of fraud sufficient to support a finding that respondent might have prevailed in the event of trial.

Roger G. Cotner, for the petitioners.
Peter M. Ritteman, for the respondent.

OPINION

TANNENWALD, Judge: This case is before us on petitioners' motion for reasonable litigation costs under section 74301 and Rule 231. Respondent having conceded that petitioners exhausted their administrative remedies, the issues for decision are (1) whether petitioners were prevailing parties within the meaning of section 7430 and, if so, (2) what litigation expenses are recoverable as reasonable.

Petitioners Virgil M. and Lois Whitesell are husband and wife and resided in London, England, at the time they filed their petitions herein.

By notice of deficiency dated September 3, 1982, respondent determined a deficiency in petitioners' Federal income tax for 1978 of $8,770.24 and an addition to tax under section 6653(b) of $4,385.12. The petition relating to this

'Unless otherwise noted, all section references are to the Internal Revenue Code as amended and in effect at the relevant times, and all Rule references are to the Tax Court Rules of Practice and Procedure.

notice of deficiency was timely filed on December 20, 1982, and assigned docket No. 29402-82.

By notice of deficiency dated December 20, 1982, respondent determined the following deficiencies in petitioners' Federal income tax:

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The petition relating to this notice of deficiency was timely filed on May 2, 1983, and assigned docket No. 9885-83.

On January 17, 1983, petitioners' request for Columbus, Ohio, as the place of trial in docket No. 29402-82 was granted. On May 2, 1983, petitioners' request for Columbus, Ohio, as the place of trial in docket No. 9885-83 was granted. On March 1, 1984, petitioners' motion to consolidate docket No. 29402-82 and docket No. 9885-83 for purposes of trial, briefing, and opinion was granted. On August 21, 1985, petitioners moved to change the place of trial from Columbus to Detroit, Michigan, because their counsel had moved his office to Michigan. The motion was granted on August 23, 1985.

The consolidated cases were set for trial on the May 12, 1986, Detroit calendar. Petitioners moved for a continuance, which was granted on March 7, 1986, and the cases were again set for trial, on the March 9, 1987, Detroit calendar. After they were set for trial, the parties agreed to settle the two cases for the following amounts:

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Pursuant to the parties' agreement, decisions were entered in both dockets on March 19, 1987. Upon petitioners' motion for litigation costs, these decisions were vacated and filed as supplemental stipulations.

The deficiency determined for 1977 related to the proper taxpayer to recognize gain from the sale of certain stock. On December 29, 1976, Mr. Whitesell, an officer and stockholder of Williams Printing Co. (Williams), granted Williams an option to purchase Mr. Whitesell's 10,200 shares of Williams stock. On December 30, 1976, Mr. Whitesell transferred a total of 8,125 shares of this stock to his five children and to the Vultee Church of Christ. As secretary-treasurer of Williams, Mr. Whitesell signed the stock certificates that accomplished the transfer on December 31, 1976. Each certificate stated that the shares it represented were subject to the option. Petitioners filed gift tax returns reporting the transfers.

On February 11, 1977, Williams exercised its option to purchase the stock, paying a total of $39,794.25 to petitioners, their children, and the church. Petitioners and each of their children reported a proportionate share of the gain from this transaction. On Schedule D (Capital Gains and Losses) of their Form 1040 (Individual Income Tax Return) for 1977, petitioners reported proceeds of $8,105, and a long-term capital gain of $7,380, from a sale of "Wms." Petitioners reported total gross income of $49,873 for 1977.

The deficiencies determined for 1978, 1979, and 1980 involved unreported income and deductions. Petitioners reported income, credits, and deductions on Forms 1041 (Fiduciary Income Tax Return) for the Whitesell trust and the LOV trust, which were both grantor-type trusts, rather then on their own Forms 1040. From the first appeals conference, petitioners conceded that the latter would have been the "more proper" treatment. Respondent also determined additions to tax under section 6653(b) for each of those years. During settlement negotiations in Columbus, Ohio, respondent offered to concede all of the addition for fraud. Later, during settlement negotiations in Muskegon, Michigan, after the place of trial was moved to Detroit, he offered to concede one-half of the addition for fraud.

Petitioners paid, or agreed to pay, their attorney $18,984.42 in fees and expenses, court costs, and other disbursements between December 20, 1982, and June 30, 1987, $16,136.76 (85 percent) of which is applicable to docket No. 9885-83. Petitioners individually incurred

$11,222.45 in expenses, $9,539.08 of which is applicable to docket No. 9885-83.2

Initially, we must determine in which of these cases we have the authority to award litigation costs. Respondent argues that section 7430 is not applicable to docket No. 29402-82, because that docket was not filed after February 28, 1983, the effective date of the section. Petitioners, on the other hand, argue that because the two cases were consolidated, and the second case was filed after the effective date of the statute, litigation costs may be awarded in both.

We agree with respondent that we may not award litigation costs in docket No. 29402-82. Absent a statutory provision, this Court does not have authority to award attorney's fees or litigation costs. Section 7430, the only statutory provision granting us authority to award litigation costs (compare McQuiston v. Commissioner, 78 T.C. 807 (1982), affd. without published opinion 711 F.2d 1064 (9th Cir. 1983)),3 is effective for actions commenced after February 28, 1983. Tax Equity and Fiscal Responsibility Act of 1982, Pub. L. 97-248, sec. 292(e), 96 Stat. 324, 574. A case is commenced in this Court by filing a petition. Rule 20(a). Thus, petitioners' case in docket No. 29402-82 was commenced on December 20, 1982. Based on the language of the effective date provision, we do not have authority to award litigation costs in that case.

Petitioners, however, rely on section 7430(d), which allows this Court to treat multiple actions as consolidated, even if they have not been, for purposes of awarding litigation costs. Section 7430(d) does not, by its terms, confer

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3See also Alvarado v. Commissioner, T.C. Memo. 1985-118, affd. without published opinion 781 F.2d 901 (5th Cir. 1986) (even after enactment of sec. 7430, Court without jurisdiction to award attorney fees in cases commenced before section's effective date).

"That subsection provides:

SEC. 7430(d). MULTIPLE ACTIONS.-For purposes of this section, in the case of—

(1) multiple actions which could have been joined or consolidated, or

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