Windsor Production Corporation - Page 15

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          that the amount of interest would be reported to the Internal               
          Revenue Service.  Id.                                                       
              Respondent contends that respondent was substantially                   
          justified in asserting the accumulated earnings issue because               
          petitioner did not provide documents relevant to that issue in              
          its protest letter dated May 15, 1991.  We disagree.  Respondent            
          first proposed to assert the accumulated earnings issue in August           
          1991.  It is unreasonable to fault petitioner for not                       
          anticipating that respondent would raise the accumulated earnings           
          issue later.                                                                
              Respondent contends that petitioner acknowledged the need               
          for trial in its motion to shift the burden of proof to                     
          respondent.  We disagree; petitioner's motion to shift the burden           
          of proof did not state that trial was needed.  Rather, petitioner           
          asserted that respondent should bear the burden of proof if the             
          matter went to trial.                                                       
              Respondent contends that petitioner admitted that trial                 
          was needed by proposing 65 findings of fact after trial.  We                
          disagree.  Petitioner properly proposed findings of fact in its             
          posttrial brief.  This has no bearing on whether respondent's               
          position was substantially justified.                                       
              Respondent argues that respondent's position was                        
          substantially justified because                                             
              In response to discovery, petitioners represented                       
              that they had produced all documents establishing the                   
              allegations in their petition; but in fact not all of                   



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