 A court can award reasonable administrative costs and reasonable litigation costs to a taxpayer that is a prevailing party in a dispute with the IRS. The issue came up in a recent tax court case involving a donated conservation easement. The taxpayer claimed a $10.8 million charitable deduction for the donation, and the IRS disallowed the entire amount, but also took a fallback position that the easement was worth $20,000. The tax court denied the deduction, but got reversed on appeal. Ultimately, the taxpayer got a deduction of about $8 million.