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Commissioner, 108 T.C. 430, 443 (1997) (quoting Pierce v.
Underwood, supra at 566 n.2).
The relevant inquiry is "whether the Commissioner knew or
should have known that * * * [his] position was invalid at the
onset". Nalle v. Commissioner, 55 F.3d 189, 191 (5th Cir. 1995),
affg. T.C. Memo. 1994-182. We look to whether the Commissioner's
position was reasonable given the available facts and
circumstances at the time that the Commissioner took his
position. See Maggie Management Co. v. Commissioner, supra at
443; DeVenney v. Commissioner, 85 T.C. 927, 930 (1985).
The fact that the Commissioner eventually concedes, or even
loses, a case does not establish that his position was
unreasonable. See Estate of Perry v. Commissioner, 931 F.2d
1044, 1046 (5th Cir. 1991); Sokol v. Commissioner, 92 T.C. 760,
767 (1989). However, the Commissioner's concession remains a
factor to be considered. See Powers v. Commissioner, 100 T.C.
457, 471 (1993), affd. in part, revd. in part and remanded on
another issue 43 F.3d 172 (5th Cir. 1995).
As relevant herein, the position of the United States that
must be examined against the substantial justification standard
with respect to the recovery of administrative costs is the
position taken by the Commissioner as of the date of the notice
of deficiency. See sec. 7430(c)(7)(B). The position of the
United States that must be examined in light of the substantial
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