Sec.  1.1504   Eligibility of applicants.

   (a) To be eligible for an award of attorney fees and other expenses under
   the EAJA, the applicant must be a party, as defined in 5 U.S.C. 551(3), to
   the adversary adjudication for which it seeks an award. The applicant must
   show that it meets all conditions of eligibility set out in this paragraph
   and in paragraph (b) of this section.

   (b) The types of eligible applicants are as follows:

   (1) An individual with a net worth of not more than $2 million;

   (2) The sole owner of an unincorporated business who has a net worth of not
   more than $7 million, including both personal and business interests, and
   not more than 500 employees;

   (3) A charitable association as defined in section 501(c)(3) of the Internal
   Revenue Code (26 U.S.C. 501(c)(3)) with not more than 500 employees;

   (4)  A  cooperative  association  as  defined  in section 15(a) of the
   Agricultural Marketing Act (12 U.S.C. 1141j(a)) with not more than 500
   employees;

   (5)  Any  other  partnership,  corporation, association, unit of local
   government, or organization with a net worth of not more than $7 million and
   not more than 500 employees;

   (6) For purposes of  Sec. 1.1505(b), a small entity as defined in 5 U.S.C. 601.

   (c) For the purpose of eligibility, the net worth and number of employees of
   an  applicant  shall  be  determined as of the date the proceeding was
   initiated.

   (d) An applicant who owns an unincorporated business will be considered as
   an “individual” rather than a “sole owner of an unincorporated business” if
   the issues on which the applicant prevails are related primarily to personal
   interests rather than to business interests.

   (e)  The  number  of employees of an applicant include all persons who
   regularly perform services for remuneration for the applicant, under the
   applicant's direction and control. Part-time employees shall be included on
   a proportional basis.

   (f) The net worth and number of employees of the applicant and all of its
   affiliates shall be aggregated to determine eligibility. Any individual,
   corporation or other entity that directly or indirectly controls or owns a
   majority of the voting shares or other interest of the applicant, or any
   corporation or other entity of which the applicant directly or indirectly
   owns or controls a majority of the voting shares or other interest, will be
   considered an affiliate for purposes of this part, unless the Administrative
   Law Judge determines that such treatment would be unjust and contrary to the
   purposes  of  the EAJA in light of the actual relationship between the
   affiliated entities. In addition, the Administrative Law Judge may determine
   that financial relationships of the applicant other than those described in
   this paragraph constitute special circumstances that would make an award
   unjust.

   (g) An applicant that participates in a proceeding primarily on behalf of
   one or more other persons or entities that would be ineligible is not itself
   eligible for an award.

   [ 47 FR 3786 , Jan. 27, 1982, as amended at  52 FR 11653 , Apr. 10, 1987;  61 FR 39898 , July 31, 1996]