Jung Sik and Bok S. Lim - Page 6




                                        - 6 -                                         

          advised that litigation costs would be requested if the case                
          could not be resolved quickly.  At a May 15, 1998, trial                    
          preparation conference, the parties discussed a settlement under            
          which respondent would allow the requested overpayment, and                 
          petitioners would agree not to assert a claim for attorney’s                
          fees.  Petitioners decided not to accept the settlement and to              
          proceed to trial.                                                           
               The Commissioner’s position is substantially justified if              
          that position could satisfy a reasonable person and if it has a             
          reasonable basis in both fact and law.  See Pierce v. Underwood,            
          487 U.S. 552, 565 (1988).  We examine the facts known to the                
          Commissioner at the time the position was taken.  See Maggie                
          Management Co. v. Commissioner, 108 T.C. 430, 443 (1997).                   
          Respondent must prove that his position was substantially                   
          justified.  See sec. 7430(c)(4)(B).  The fact that the                      
          Commissioner eventually loses or concedes a case does not                   
          establish an unreasonable position.  See Wasie v. Commissioner,             
          86 T.C. 962, 968-969 (1986).  However, the Commissioner’s                   
          concession does remain a factor to be considered.  See Dugan v.             
          Commissioner, T.C. Memo. 1997-458.                                          
               Contrary to petitioners’ position, respondent contends that            
          he was substantially justified in his position from the issuance            
          of the statutory notice of deficiency on May 23, 1997, until the            
          calendar call on May 18, 1998.  Petitioners did not provide                 





Page:  Previous  1  2  3  4  5  6  7  8  9  Next

Last modified: May 25, 2011