- 14 - e. Whether Respondent's Desire to Have a Trial Bars an Award of Litigation Fees Respondent contends that trial was needed so respondent could assess the probative value, admissibility of testimony and documents offered by petitioner to prove its business needs. For example, respondent wanted to assess Arnold Saltzman's credibility at trial. Respondent argues that until respondent conceded the accumulated earnings tax issues, respondent's litigating position was substantially justified because this case could only be resolved by examining the facts and circumstances, including assessing the credibility of the witnesses. We disagree. The Government is not automatically excused from having a reasonable basis in fact in cases where facts and witnesses' credibility are in dispute. Respondent cites Richman v. Commissioner, T.C. Memo. 1994- 140 for the proposition that respondent's position is substantially justified where the issues are factual and depend on a determination of credibility. This is not what we held in Richman. In Richman, the Commissioner determined that the taxpayer fraudulently omitted interest income. We held that the Commissioner had a reasonable basis in fact because, when respondent issued the notice of deficiency, respondent knew that the taxpayer used an incorrect Social Security number on his account statements, and the account statements contained a noticePage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Next
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