United States v. Hudson
- Summarized by Carrie Hardman , Winston & Strawn LLP
- 14 years 1 month ago
- Citation:
- 2010 U.S. App. LEXIS 23338; 2010 WL 4483986
- Tag(s):
-
- Ruling:
- A prevailing pro se attorney-litigant is ineligible to seek and be awarded reasonable litigation costs, including attorney’s fees, in a proceeding relating to the collection of tax, interest, or penalties under the Internal Revenue Code pursuant to 26 U.S.C. §7430. Other statutory contexts – including, but not limited to, the Freedom of Information Act, Title VII, and the Individuals with Disabilities Education Act – and sister Circuits who ruled on the issue support rendering a pro se attorney-litigant ineligible to receive attorney’s fees in this context.
In accordance with the “plain wording” of 26 U.S.C. §7430(c)(1)(B)(iii), a pro se attorney-litigant may recover only if he or she has either paid or incurred fees for the services of an attorney. Citing Black’s Law Dictionary, while an attorney-litigant’s time defending him or herself in the proceeding may be considered an “expense,” it is not considered a “fee.” Also based on the Black’s Law Dictionary definition of an attorney – “a legal agent” – a pro se attorney-litigant cannot act as an agent for himself.
Further, in harmony with the Supreme Court decision in Kay v. Ehrler, 499 U.S. 432 (1991), awarding attorney’s fees to a pro se attorney-litigant pursuant to 26 U.S.C. §7430 would fail to serve the overriding interest in obtaining independent counsel for litigants. To award a pro se litigant fees, including those who are attorneys, would create a disincentive to employ counsel.
- Procedural context:
- Appeal by the Debtor from judgment of the United States District Court for the Northern District of New York (Scullin, J.), reversing the decision of the United States Bankruptcy Court for the Northern District of New York (Littlefield, J.) awarding attorney’s fees under 26 U.S.C. §7430.
- Facts:
- Eleanor and Paul Hudson, principals of a real estate rental firm, entered a stipulation as to the amount of total liability attributed to Hudsons as individuals for unpaid employment taxes to the IRS. Paul Hudson filed for bankruptcy relief. During the course of the Debtor’s bankruptcy case, the IRS sought to recover from the Debtor and, separately, levy penalties on Mrs. Hudson in excess of the stipulated amount. Relying on a ruling from the United States District Court for the Northern District of New York absolving Mrs. Hudson of liability for any interest on the stipulated amount, the Debtor sought to be and, by a ruling of the United States Bankruptcy Court for the Northern District of New York, was similarly relieved of liability for interest accrued on the tax penalties. As the prevailing party, Mr. Hudson sought attorney’s fees pursuant to 26 U.S.C. §7430. The Bankruptcy Court awarded fees, noting that allowance of reasonable fees to pro se attorney-litigants promotes “vigorous advocacy” while still retaining control over fee awards based on the facts of the case. The IRS appealed and the District Court reversed. The Debtor appealed.
- Judge(s):
- Jacobs, C.J., Katzmann, J., Livingston, J.
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