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deficiency was issued or the answer was filed, because, at both
times, petitioner had already paid her tax liability for 1988.
In contrast, respondent maintains that her position was
substantially justified throughout the administrative and
judicial proceedings. Respondent contends that petitioner was
liable for income tax for 1988 and that respondent was forced to
issue a notice of deficiency in order to assess such liability
because petitioner did not file a valid return. Respondent also
contends that the 6-month period between the time that the answer
was filed and the time that respondent agreed to settle the
entire case was a reasonable period of time for respondent to
locate the return filed by petitioner and Mr. Buck on June 12,
1995, and to verify the information set forth on such return.
Thus, respondent maintains that her position remained
substantially justified throughout the judicial proceeding.
1. The Administrative Proceeding
We begin with petitioner's contention that respondent's
position was not substantially justified at the time that the
notice of deficiency was issued.
This Court has previously set forth the essential elements
of a return:
First, there must be sufficient data to calculate [a] tax
liability; second, the document must purport to be a return;
third, there must be an honest and reasonable attempt to
satisfy the requirements of the tax law; and fourth, the
taxpayer must execute the return under penalties of perjury.
[Beard v. Commissioner, 82 T.C. 766, 777 (1984), affd. 793
F.2d 139 (6th Cir. 1986).]
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