- 9 -
amount in controversy and meets the applicable net worth
requirements. Respondent argues, however, that the position
taken in both the administrative and court proceedings was
substantially justified. Rule 232(e); Dixson Corp. v.
Commissioner, 94 T.C. 708, 714-715 (1990); Gantner v.
Commissioner, 92 T.C. 192, 197 (1989), affd. 905 F.2d 241 (8th
Cir. 1990). Accordingly, the Court must decide whether the
position of the United States in the administrative and court
proceedings was not substantially justified.
In deciding this issue, we must first identify the point in
time at which the United States is considered to have taken a
position and then decide whether the position taken from that
point forward was substantially justified. The "not
substantially justified" standard is applied as of the separate
dates that respondent took a position in the administrative
proceeding as distinguished from the proceeding in this Court.
Sec. 7430(c)(7)(A) and (B); Han v. Commissioner, T.C. Memo. 1993-
386. For purposes of the administrative proceeding, respondent
took a position on August 15, 1991, the date upon which the
notice of deficiency for 1986 and 1987 was issued to petitioner.
Sec. 7430(c)(7)(B). For purposes of the proceeding in this
Court, respondent took a position on January 9, 1992, the date
upon which respondent filed the answer in this case. See Huffman
v. Commissioner, 978 F.2d 1139, 1143-1147 (9th Cir. 1992), affg.
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