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                  UNITED STATES of America, Defendant-Appellee.
            CHURCH OF SCIENTOLOGY INTERNATIONAL, Plaintiff-Appellant,
                  UNITED STATES of America, Defendant-Appellee.
                            Nos. 92-55188, 92-55437.
                 United States Court of Appeals, Ninth Circuit.
                       Argued and Submitted April 8, 1993.
                              Decided June 9, 1993.
  Appeal from the United States District Court for the Central District of
 California, Nos. CV-91-5343-WDK, CV-91-5344-WDK;  William D. Keller,
 District Judge, Presiding.

  Before:  HALL, WIGGINS, and TROTT, Circuit Judges
                          MEMORANDUM DISPOSITION [FN*]
  **1 The district court denied motions by the Church of Scientology
 International and the Church of Scientology Western United States ("Churches")
 for fees and costs under 26 U.S.C. s 7430 in connection with the quashing of
 three summonses.  The district court concluded that the Churches had failed to
 establish that the position of the United States was not substantially
 justified.  The Churches appeal, claiming error in the district court's
 interpretation of the statute.  The district court had jurisdiction pursuant
 to 26 U.S.C. s 7609(h).  Our jurisdiction derives from 26 U.S.C. s
 7609(h) and 28 U.S.C. s 1291.  We affirm.
  On September 26, 1991, the Internal Revenue Service issued three summonses to
 Joseph Yanny, former counsel to the Churches.  The summonses demanded the
 production of information that the Churches claim was obtained during Yanny's
 lengthy tenure as the Churches' attorney.  The summonses indicated that October
 8, 1991, was the date for compliance, but a letter accompanying the summonses
 instructed Yanny that the IRS expected compliance by October 3.  The letter
 also indicated that Yanny need not notify the Churches that the summonses had
 been served.
  The Churches learned of the summonses on October 1, 1991, at about 5:00 p.m.,
 when Yanny's attorney called the Churches' attorney.  Concerned that any
 challenge to the validity of the summonses would be mooted by Yanny's
 compliance with them on October 3rd, counsel for the Churches worked through
 the night to bring petitions to quash the summonses.
  Early in the morning of October 2nd, the Churches' counsel attempted to
 resolve the matter by contacting an Assistant United States Attorney, who was
 representing the IRS in another pending summons enforcement action between the
 Churches and the IRS.  The Churches maintain, and the IRS does not refute, that
 the IRS's attorney refused to withdraw the summonses.  As a result, the
 Churches were compelled to complete work on the petitions to quash and filed
 them in the district court on the afternoon of October 2nd.  The petitions
 sought to quash the summonses temporarily to prevent any breach of attorney-
 client confidences, which the Churches feared would occur if Yanny complied
 with the summonses.
  Late in the afternoon of October 3rd an order was entered enjoining the IRS
 from conducting its examination of Yanny until further action by the court
 determined that the examination was appropriate.  Thereafter, the IRS indicated
 that it would not attempt to enforce the summonses pending final resolution of
 the petitions to quash.  In response to the Churches' petitions, the IRS
 withdrew all of the summonses and asked the district court to dismiss the
 petitions as moot in light of the withdrawals.  The court dismissed all three
  Subsequently, the Churches filed motions for fees and costs, seeking to
 recover the expenses incurred in bringing the petitions.  The district court
 denied the motions, and the Churches appeal.
                               STANDARD OF REVIEW
  **2 We review the district court's interpretation of 26 U.S.C. s 7430 de
 novo.  Huffman v. Commissioner, 978 F.2d 1139, 1143 (9th Cir.1992).  The
 district court's determination as to whether the position of the United States
 was substantially justified is reviewed for an abuse of discretion.
 Huffman, 978 F.2d at 1143;  Estate of Merchant v. Commissioner, 947 F.2d
 1390, 1392-93 (9th Cir.1991);  Bertolino v. Commissioner, 930 F.2d 759, 761
 (9th Cir.1991).
  To recover costs and attorney's fees under s 7430, the Churches must show
 that they are prevailing parties and that they have exhausted their
 administrative remedies.  See 26 U.S.C. s 7430 (1988).  The IRS concedes
 that the Churches have exhausted their administrative remedies and does not
 argue here that any of the restrictions placed on recovery of attorney's fees
 under s 7430(b) apply in this case.  Thus, the question before us is whether
 the Churches are prevailing parties within the meaning of the statute.
  Section 7430(c)(4) provides that "[t]he term 'prevailing party' means any
 party ... (i) which establishes that the position of the United States in the
 proceeding was not substantially justified, (ii) which ... (II) has
 substantially prevailed with respect to the most significant issue ..., and
 (iii) which meets the requirements of the 1st sentence of section
 2412(d)(1)(B) of title 28...."  The parties agree that the Churches have
 substantially prevailed with respect to the most significant issue and that the
 Churches' request for fees meets the requirements of s 2412(d)(1)(B).  The
 only issue remaining is whether the position of the United States was
 substantially justified.
  Section 7430(c)(7) states:
   The term "position of the United States" means--(A) the position taken by the
 United States in a judicial proceeding ... and (B) the position taken in an
 administrative proceeding ... as of the earlier of (i) the date of the receipt
 by the taxpayer of the notice of the decision of the Internal Revenue Service
 Office of Appeals, or (ii) the date of the notice of deficiency.
  Id. (emphasis added).  The IRS contends that this section precludes
 consideration of any conduct prior to the initiation of litigation in
 determining whether the position of the United States was substantially
 justified because there was no notice of deficiency or notice of decision from
 the IRS Office of Appeals in these cases.  The Churches concede that there was
 neither a deficiency notice nor an Office of Appeals notice of decision
 involved here.  Nevertheless, they contend that the district court should have
 considered the IRS's prelitigation conduct in determining whether the position
 of the United States was substantially justified.  The district court agreed
 with the IRS, and the law compels us to affirm.
  Section 7430 is a waiver of sovereign immunity.  See Campbell v. United
 States, 835 F.2d 193, 195 (9th Cir.1987) ("Except to the extent it has waived
 its immunity, the federal government is immune from claims for attorneys'
 fees.");  In re Graham, 981 F.2d 1135, 1138-39 (10th Cir.1992).  As such, we
 must construe it strictly in favor of the government, and we should not find a
 waiver absent clear congressional intent.  United States v. Washington, 872
 F.2d 874, 877 (9th Cir.1989);  Campbell, 835 F.2d at 195.
  **3 Because neither a notice of deficiency nor a notice of decision from the
 Office of Appeals ever issued here, s 7430 permits the consideration only of
 the IRS's position "in a judicial proceeding."  Nonetheless, the Churches
 contend that s 7430 should not be read to preclude consideration of the
 IRS's conduct prior to the filing of the petitions to quash in determining
 whether the position of the United States was substantially justified in the
 judicial proceeding.  Unfortunately, they fail to cite any authority for such a
 reading. [FN1]  They argue that their interpretation is consistent with
 congressional intent and prevents circumvention of the attorneys' fees
 provision by the IRS.  They also argue that the IRS should not be permitted to
 take indefensible positions prior to the initiation of litigation and then
 avoid paying attorney's fees by acting circumspectly once a petition or
 complaint is filed.  While we find the Churches' arguments persuasive, they are
 inconsistent with the express provisions of the statute, and we are wholly
 without authority to rewrite the statute.  Congressional intent to waive the
 sovereign immunity of the federal government " 'cannot be implied but must be
 unequivocally expressed.' "  United States v. Mitchell, 445 U.S. 535, 538
 (1980) (quoting United States v. King, 395 U.S. 1, 4 (1969));  see also
 Washington, 872 F.2d at 877;  cf. Barnes v. United States, No. S90-
 1592-WBS/GGH, 1991 WL 323001, at *4 (E.D.Cal. Nov. 26, 1991) ("It is not the
 province of the courts, but rather that of Congress to remedy this apparent
 loophole in the statute [s 7430].").
  Few courts have considered the question now before us.  Those that have
 uniformly have held that when there is neither a notice of deficiency nor a
 notice of decision from the IRS Office of Appeals, "the express terms of the
 statute ... limit [a court's] assessment of the United States' position ... to
 the position taken as of the initiation of the judicial proceeding."
 Nathaniel v. United States, No. S91-0056-WBS/GGH, 1991 WL 323002, at *
 2 (E.D.Cal. Nov. 26, 1991) (emphasis added);  see also Nunn v. Commissioner,
 63 Tax Ct.Mem. Dec. (CCH) 3060 (1992);  Estate of Holmes v. United States,
 No. 89-2581, 1990 WL 10062, at *2-3 (E.D.Pa. Feb. 5, 1990).  Moreover,
 this court unequivocally stated in Huffman that "[c]ase law holds that if
 the Government concedes the petitioner's case in its answer, its conduct is
 reasonable." [FN2]  978 F.2d at 1148;  see also Bertolino, 930 F.2d at
 761 (indicating that if the IRS settles a case with reasonable dispatch once a
 triggering event occurs, its conduct is substantially justified);  cf.
 Hanson v. Commissioner, 975 F.2d 1150, 1156 n. 4 (5th Cir.1992) (court left
 open the question whether the government should have to pay fees when it
 surrenders at the very outset of litigation but indicated that at that point a
 "plaintiff's cost will be very small, perhaps de minimis," suggesting that such
 a surrender may preclude the recovery of attorney's fees under s 7430).
  **4 More importantly, the plain language of the statute indicates that the
 relevant position of the United States is its position in a judicial
 proceeding.  It is axiomatic that the United States can have no position in a
 judicial proceeding until a judicial proceeding actually has been initiated.  A
 judicial proceeding is initiated only upon the filing of a petition or
 complaint.  See Huffman, 978 F.2d at 1145 ("[C]ourts have held that actions
 taken ... by the IRS prior to initiation of litigation in the Tax Court or the
 district court are 'non-judicial in nature.' ");  see also United States v.
 Baggot, 463 U.S. 476, 479 (1983) (indicating that an IRS audit and its internal
 appeal component are not judicial proceedings).  Thus, while conduct prior to
 the initiation of litigation may color a court's determination as to whether
 the position of the United States was substantially justified, see Huffman,
 978 F.2d at 1148 ("Congressional intent behind section 7430 is not served by
 looking only to the answer to determine whether the government's position in
 the judicial proceeding was 'substantially justified.' ");  Hanson, 975 F.2d
 at 1152 n. 2 (indicating that the court could review the government's position
 in the judicial proceeding against the backdrop of administrative actions to
 determine if the position in litigation was substantially justified), the
 government's position in the judicial proceeding must be determined with
 reference only to actions taken after a complaint or petition has been filed.
  Here, the parties agree that the only action taken by the IRS following the
 Churches filing of the petitions was to withdraw the subpoenas.  Thus, we must
 conclude that the position of the United States in the judicial proceeding was
 substantially justified and that the district court's interpretation of the
 statute was correct.

      FN* This disposition is not appropriate for publication and may not be
     cited to or by the courts of this circuit except as provided by 9th Cir.R.

      FN1. The Churches do cite Kenagy v. United States, 942 F.2d 459 (8th
     Cir.1991), to support their position.  Considering the same version of the
     statute at issue here, the Kenagy court stated that "[t]he position of
     the United States is the legal and factual position asserted by it during
     the administrative and court proceedings, regardless of whether the
     position originated before or after the proceedings began."  Id. at
     464.  We note, however, that a notice of decision from the Office of
     Appeals had issued in Kenagy.  In addition, Kenagy can be read to
     support the district court's position as easily as it can be read to
     advance the Churches' argument.  The opinion states that a court should
     only consider the position of the United States during court proceedings in
     a case like this one.  Thus, we find the Churches' citation to the
     Kenagy language defining "position of the United States" unpersuasive
     and wholly inapposite to the resolution of this case.

      FN2. Under earlier versions of the statute the standard was reasonable not
     substantially justified.  The change, however, is little more than
     semantic.  Subsequent cases have indicated that the substantially justified
     standard is basically the same as the former reasonable standard.  See
     Huffman, 978 F.2d at 1147 n. 8 (" '[s]ubstantially justified' means
     'justified to a degree that could satisfy a reasonable person' ") (quoting
     Pierce v. Underwood, 487 U.S. 552, 565 (1988));  Kenagy, 942 F.2d at
     464 ("the government's position is not substantially justified where it is