-19-
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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