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a valid position relating to the year in which the check was
includable has no bearing on our conclusion that respondent's
position was not substantially justified on the earlier dates
identified above.
II. Exhaustion of Administrative Remedies
Section 7430(b)(1) generally requires that a party seeking
litigation costs exhaust all administrative remedies. Minahan v.
Commissioner, 88 T.C. 492 (1987). Section 301.7430-1(b)(1),
Proced. & Admin. Regs., provides that, where "an Appeals office
conference is available", administrative remedies are exhausted
only if a taxpayer (1) participated in such conference prior to
filing a petition, or (2) requested an Appeals conference and
such request was denied. Respondent contends that petitioner did
not participate in an Appeals conference. Petitioner concedes
this point, but contends that prior to the filing of the petition
no Appeals conference was "available" within the meaning of
section 301.7430-1(b), Proced. & Admin. Regs.
Several factors lead us to conclude that petitioner
exhausted her administrative remedies. First, respondent's 30-
day letter made no mention of the Appeals function at all.2 The
30-day letter stated that "THE ENCLOSED PUBLICATION 1383 CONTAINS
2 By contrast, the Department of the Treasury's Statement of
Procedural Rules recognizes the importance of apprising taxpayers
of their Appeals rights and states that a 30-day letter includes
a description of such rights. Sec. 601.105, Statement of
Procedural Rules.
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