102 STAT. 3744
PUBLIC LAW 100-647—NOV. 10, 1988 "(1) reasonable administrative costs incurred in connection with such administrative proceeding within the Internal Revenue Service, and "(2) reasonable litigation costs incurred in connection with such court proceeding. "(b) LIMITATIONS.— "(1) REQUIREMENT
THAT
ADMINISTRATIVE
REMEDIES
BE
EXHAUSTED.—^A judgment for reasonable litigation costs shall not be awarded under subsection (a) in any court proceeding unless the court determines that the prevailing party has exhausted the administrative remedies available to such party within the Internal Revenue Service. "(2) ONLY COSTS ALLOCABLE TO THE UNITED STATES.—An award under subsection (a) shall be made only for reasonable litigation and administrative costs which are allocable to the United States and not to any other party. "(3) EIxcLusiON OF DECLARATORY JUDGMENT PROCEEDINGS.— "(A) IN GENERAL.—No award for reasonable litigation costs may be made under subsection (a) with respect to any declaratory judgment proceeding. "(B)
EXCEPTION
FOR
SECTION 501(CX3) DETERMINATION
REVOCATION PROCEEDINGS.—Subparagraph (A) shall not apply to any proceeding which involves the revocation of a determination that the organization is described in section 501(c)(3). "(4)
COSTS DENIED WHERE
PARTY PREVAILING PROTRACTS
PROCEEDINGS.—No award for reasonable litigation and administrative costs may be made under subsection (a) with respect to any portion of the administrative or court proceeding during which the prevailing party has unreasonably protracted such proceeding. "(c) DEFINITIONS.—For purposes of this section— "(1) REASONABLE LITIGATION COSTS.—The term 'reasonable litigation costs' includes— "(A) reasonable court costs, and "(B) based upon prevailing market rates for the kind or quality of services furnished— "(i) the reasonable expenses of expert witnesses in connection with a court proceeding, except that no expert witness shall be compensated at a rate in excess of the highest rate of compensation for expert witnesses paid by the United States, "(ii) the reasonable cost of any study, analysis, engineering report, test, or project which is found by the court to be necessary for the preparation of the party's case, and "(iii) reasonable fees paid or incurred for the services of attorneys in connection with the court proceeding, except that such fees shall not be in excess of $75 per hour unless the court determines that an increase in the cost of living or a special factor, such as the limited availability of qualified attorneys for such proceeding, justifies a higher rate. "(2) REASONABLE ADMINISTRATIVE COSTS.—The term 'reasonable administrative costs' means— "(A) any administrative fees or similar charges imposed by the Internal Revenue Service, and
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