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on the various bank statements that he reviewed during the course
of petitioners' examinations. It was petitioners' obligation to
provide the explanations.
In view of the amounts involved in the questioned
transactions and petitioners' failure to cooperate, Agent Red
acted reasonably under the circumstances. With the period of
limitations about to expire, he concluded his examinations and
adjusted petitioners' incomes based upon the information
available to him at the time.
Accordingly, we hold that respondent's positions in the
administrative and litigation proceedings were substantially
justified.
II. Respondent's Other Objections to Petitioners' Motions
Because the requirements of section 7430 are in the
conjunctive, Minahan v. Commissioner, 88 T.C. 492, 497 (1987),
our holding that respondent's position was substantially
justified operates in and of itself to deny petitioners' motions.
Consequently, we need not address respondent's other objections
to the motions.
To reflect the foregoing,
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