5 Petitioners bear the burden of proving that the position of respondent was not substantially justified. Rule 232(e); Baker v. Commissioner, 83 T.C. 822, 827 (1984), vacated and remanded on other grounds 787 F.2d 637 (D.C. Cir. 1986). In order to meet this burden, petitioners must show that legal precedent does not substantially support the position of respondent given the facts available to respondent. Coastal Petroleum Refiners, Inc. v. Commissioner, 94 T.C. 685, 688 (1990); DeVenney v. Commissioner, 85 T.C. 927, 930 (1985). A determination of reasonableness must be based upon all the facts and circumstances, as well as any legal precedents relating to the case. DeVenney v. Commissioner, supra. We may consider, among other factors, whether respondent used the costs and expenses of litigation to extract unjustified concessions from petitioners, whether respondent pursued the litigation to harass or embarrass petitioners, or whether respondent pursued the litigation for political reasons. Rutana v. Commissioner, 88 T.C. 1329 (1987); DeVenney v. Commissioner, supra. A position is "substantially justified" when it is "justified to a degree that could satisfy a reasonable person". Pierce v. Underwood, 487 U.S. 552, 565 (1988). It is not enough that a position simply possesses enough merit to avoid sanctions for frivolousness; it must have a "reasonable basis both in law and fact". Id.; see, e.g., Hanson v. Commissioner, 975 F.2d 1150, 1153 (5th Cir. 1992). Respondent's loss or concession of an issue does not, ipso facto, render respondent's position not substantially justified.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 Next
Last modified: May 25, 2011