Henry P. and Darlene C. Brantley - Page 19

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            substantially justified.  Sokol v. Commissioner, 92 T.C. 760, 767                           
            (1989).  To rule otherwise would "not only distort the truth but                            
            penalize and thereby discourage useful settlements."  Pierce v.                             
            Underwood, supra at 568.  The reasonableness of the Commissioner's                          
            position necessarily requires considering what the Commissioner                             
            knew at the time.  Cf. Rutana v. Commissioner, 88 T.C. 1329, 1334                           
            (1987); DeVenney v. Commissioner, 85 T.C. 927, 930 (1985).                                  
                   Respondent's position was reasonable in light of the issue                           
            presented and the information that was available to her during the                          
            administrative and judicial proceedings.  See, e.g., Harrison v.                            
            Commissioner, 854 F.2d 263 (7th Cir. 1988)(concession approximately                         
            6 months after answer filed, after respondent had an opportunity to                         
            verify information, held reasonable), affg. T.C. Memo. 1987-52;                             
            Wickert v. Commissioner, 842 F.2d 1005 (8th Cir. 1988) (concession                          
            10 days after filing of answer, although it took several months to                          
            draft the stipulation of settlement, held to be reasonable), affg.                          
            T.C. Memo. 1986-277; Ashburn v. United States, 740 F.2d 843 (11th                           
            Cir. 1984)(11-month delay in conceding case not unreasonable                                
            because the issues were not simple); White v. United States, 740                            
            F.2d 836, 842 (11th Cir. 1984)(concession of issue 3 months after                           
            issue raised was reasonable).                                                               
                  In conclusion, we hold that respondent's administrative and                           
            judicial position was substantially justified; i.e., respondent's                           
            position had a reasonable basis in both fact and law.                                       






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