4
proceedings. The issues remaining for our decision, therefore,
are (1) whether petitioners substantially prevailed as to the
amount in controversy or most significant issue, and (2) whether
the position of respondent was substantially justified.
Section 7430(c)(7)(A) defines the "position of the United
States" to mean (A) the position taken by the United States in a
judicial proceeding (to which the section applies) and (B) the
position taken in an administrative proceeding (to which the
section applies) as of the earlier of (i) the date of the receipt
by the taxpayer of the notice of the decision of the Internal
Revenue Service Office of Appeals or (ii) the date of the notice
of deficiency. In this case, there was no separate notice from
the IRS Office of Appeals prior to the issuance of the notice of
deficiency. Therefore, for purposes of section 7430, the United
States is considered to have taken a position in the
administrative proceeding on October 11, 1990, the date the
notice of deficiency was issued by respondent.
For civil tax cases commenced after December 31, 1985,
section 1551(d)(1) of the Tax Reform Act of 1986, Pub. L. 99-514,
100 Stat. 2085, 2752, changed the language referring to the
position of the United States from "unreasonable" to "not
substantially justified". However, this Court has held that the
substantially justified standard does not represent a departure
from the reasonableness standard. Sokol v. Commissioner, 92 T.C.
760, 763-764 n.7 (1989); Sher v. Commissioner, 89 T.C. 79, 84
(1987), affd. 861 F.2d 131 (5th Cir. 1988).
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