### Question
How is the "prevailing party" defined?


### Answer
The term **prevailing party** is defined in *26 U.S.C. § 7430* as follows -

> any party in any proceeding to which subsection (a) applies (other than the United States or any creditor of the taxpayer involved)—



(i) which—



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



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


  


(ii) which meets the requirements of the 1st sentence of section 2412(d)(1)(B) 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(d)(2)(B) of such title 28 (as so in effect)

#### Citation:
  - *26 U.S.C. § 7430*
  - Heading: **Subtitle F-Procedure and Administration > CHAPTER 76-JUDICIAL PROCEEDINGS > Subchapter B-Proceedings by Taxpayers and Third Parties**

