- 5 -
substantially justified or was unreasonable. Sec.
7430(c)(4)(A)(i); Rule 232(e); Polyco, Inc. v. Commissioner,
supra at 965; Minahan v. Commissioner, supra at 498; DeVenney v.
Commissioner, 85 T.C. 927, 928-930 (1985). The pre-1986 version
of section 7430 used the term "unreasonable". The Tax Reform Act
of 1986 replaced "unreasonable" with "not substantially
justified". Powers v. Commissioner, 100 T.C. 457, 471 (1993).
This Court and others have concluded that the substantial
justification standard is essentially the prior law's
reasonableness standard couched in new language. Huffman v.
Commissioner, 978 F.2d 1139, 1147 n.8 (9th Cir. 1992), affg. in
part, revg. in part and remanding T.C. Memo. 1991-144; Powers v.
Commissioner, supra at 471; Rutana v. Commissioner, 88 T.C. 1329,
1333 (1987).
For purposes of the administrative proceedings in this case,
respondent's position is that which she stated in the notice of
deficiency. Sec. 7430(c)(7)(B). See Huffman v. Commissioner,
supra at 1143-1147. For purposes of the court proceedings in
this case, respondent's position is that which she set forth in
the answer to the petition, as subsequently amended. Sec.
7430(c)(7)(A); see Huffman v. Commissioner, supra at 1147-1148.
The administrative and litigation positions of respondent
are substantially justified if they have a reasonable basis in
both law and fact or are sufficient to satisfy a reasonable
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