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substantially justified.3 Petitioner argues that respondent's
position was not substantially justified because the payments she
received were not alimony within the meaning of section 71.
Petitioner asserts that the payments were not alimony because
they were made in accordance with the terms of a promissory note
which provided that the payments would continue after her death.
First we must determine whether petitioner has met her
burden of proving that respondent's position in the civil
proceeding was not substantially justified. For purposes of
administrative costs, respondent's position is measured as of the
earlier of the date of the taxpayer's receipt of the IRS Office
of Appeals notice of decision or the date of the notice of
deficiency. Sec. 7430(c)(7)(B). Since there was no notice of
decision from the IRS Office of Appeals, we must look to the date
of the notice of deficiency. Id. The notice of deficiency in
this case is dated September 30, 1994. Thus, we will consider
respondent's position as of this date in determining whether we
will award petitioner administrative costs.
For purposes of litigation costs in a judicial proceeding,
"the Commissioner initially takes a position on the date she
files her answer in response to the petition." Lockett v.
Commissioner, T.C. Memo. 1994-144 (citing Huffman v.
Commissioner, 978 F.2d 1139, 1148 (9th Cir. 1992), affg. in part,
3 Respondent concedes that petitioner substantially
prevailed in the litigation.
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