-16-
In 1986, Congress changed the language describing the position
of the United States from "unreasonable" to "not substantially
justified", the standard applicable to the Equal Access to Justice
Act, 28 U.S.C. sec. 2412 (1988). Tax Reform Act of 1986, Pub. L.
99-514, sec. 1551, 100 Stat. 2752; H. Conf. Rept. 99-841, at II-801
(1986), 1986-3 C.B. (Vol. 4) 801. This Court has held that the
substantially justified standard does not represent a departure
from the reasonableness standard. Sher v. Commissioner, 89 T.C.
79, 84 (1987), affd. 861 F.2d 131 (5th Cir. 1988), and cases cited
therein; see also Pierce v. Underwood, supra at 563-565.
"Substantially justified" means "justified to a degree that
could satisfy a reasonable person" both as a matter of fact and
law. Pierce v. Underwood, supra at 565. That interpretation also
applies to motions for litigation costs under section 7430.
William L. Comer Family Equity Pure Trust v. Commissioner, 958 F.2d
136, 139-140 (6th Cir. 1992), affg. per curiam T.C. Memo. 1990-316;
Norgaard v. Commissioner, 939 F.2d 874, 881 (9th Cir. 1991), affg.
in part and revg. in part T.C. Memo. 1989-390. For a position to
be substantially justified, there must be "substantial evidence" to
support it. Pierce v. Underwood, supra at 564-565. In deciding
whether the Commissioner's position was substantially justified,
the Court will consider not only the basis of the Commissioner's
legal position, but also the manner in which the Commissioner
maintained that position. Wasie v. Commissioner, 86 T.C. 962, 969
(1986).
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