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exchange of documents. The trial in August of 1994 had to be
recessed because of his delays in producing documents, many of
which he and petitioners had earlier denied possessing. We find
that petitioners and Attorney Riley unreasonably protracted this
proceeding.
Respondent's Position
The position of the United States for purposes of litigation
costs refers to the position of the United States in a judicial
proceeding. Sec. 7430(c)(7)(A). A judicial proceeding in this
Court is commenced with the filing of a petition. Rule 20(a).
Generally, respondent initially takes a position on the date she
files her answer in response to the petition. Huffman v.
Commissioner, 978 F.2d 1139, 1148 (9th Cir. 1992), affg. in part
and revg. in part T.C. Memo. 1991-144.
Whether respondent's position is substantially justified
turns on a finding of reasonableness, based upon all the facts
and circumstances as well as legal precedents relating to the
cases. See Pierce v. Underwood, 487 U.S. 552 (1988) (construing
similar language in the Equal Access to Justice Act, 28 U.S.C.
sec. 2412 (1988)); Rickel v. Commissioner, 900 F.2d 655, 665 (3d
Cir. 1990), affg. in part and revg. in part on other grounds 92
T.C. 510 (1989); Huffman v. Commissioner, supra at 1147. The
fact that the Commissioner eventually loses or concedes the case
does not in itself establish that a position is unreasonable.
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