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Respondent concedes that petitioner meets this requirement.
A taxpayer has the burden of proving that it meets each
requirement before the Court may order an award of litigation and
administration costs under section 7430. Rule 232(e); Estate of
Johnson v. Commissioner, 985 F.2d 1315, 1318 (5th Cir. 1993),
Gantner v. Commissioner, 92 T.C. 192, 197 (1989), affd. 905 F.2d
241 (8th Cir. 1990); Minahan v. Commissioner, 88 T.C. 492, 497
(1987).
A taxpayer must establish that the position of the United
States in the litigation was not substantially justified to be
entitled to an award for administrative or litigation costs.
Sec. 7430(c)(4)(A)(i). The position of the United States is the
position taken by respondent: (a) In the court proceeding, and
(b) in the administrative proceeding as of the earlier of, (i)
the date the taxpayer receives the notice of the decision of the
Internal Revenue Service Office of Appeals, or (ii) the date of
the notice of deficiency. Sec. 7430(c)(7). Here, petitioner
did not receive a notice of decision from respondent's Appeals
office. Respondent's position in the notice of deficiency,
the answer, throughout trial, and until petitioner filed its
posttrial brief, was that petitioner accumulated earnings beyond
its reasonable business needs. Thus, respondent's position in
both the administrative and the judicial proceeding was that
taken in the notice of deficiency for purposes of section 7430.
Accordingly, we must decide whether respondent's position was
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