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revg. in part on other grounds and remanding T.C. Memo. 1991-
144); Han v. Commissioner, T.C. Memo 1993-386. Respondent filed
her answer on November 30, 1994. Thus, we will consider
respondent's position as of this date in determining whether to
award petitioner litigation costs. Respondent's position, namely
that petitioner failed to recognize certain payments received
from her former husband as alimony, did not change between
September 30 and November 30, 1994.
In determining whether respondent's position was
substantially justified on each of these dates, we will consider
the basis of respondent's position and the manner in which
respondent maintained that position. Wasie v. Commissioner, 86
T.C. 962, 969 (1986). Factors which may be considered include:
(1) whether the government used the costs and expenses
of litigation against its position to extract
concessions from the taxpayer that were not justified
under the circumstances of the case, (2) whether the
government pursued the litigation against the taxpayer
for purposes of harassment or embarrassment, or out of
political motivation, and (3) such other factors as the
Court finds relevant. [Sher v. Commissioner, 89 T.C.
79, 85 (1987) (quoting H. Rept. 97-404, at 12 (1981)),
affd. 861 F.2d 131 (5th Cir. 1988).]
A position is substantially justified if the position is
"justified to a degree that could satisfy a reasonable person".
Pierce v. Underwood, 487 U.S. 552, 565 (1988). Additionally, the
position must have a reasonable basis both in law and in fact.
Id.
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