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weeks prior to trial, and, at trial, respondent instead argued
that petitioner had implicitly adopted the cash method of
accounting for the payment in question. Respondent refers to the
change of theories as a "narrowing" of positions resulting from
development of facts through discovery after the court proceeding
was commenced and suggests that respondent maintained a range of
positions that included the accounting method theory during the
administrative and court proceedings in the instant case. In the
arguments opposing the motion, respondent barely mentions the
initial arguments, essentially abandons any attempt to defend
them,3 and relies on the argument ultimately asserted at trial in
order to show that the position of the United States in the
instant case was substantially justified.
We treat respondent as having conceded that the arguments
with respect to section 707(a) and the duty of consistency that
were maintained when the notice was issued and the answer was
filed were not substantially justified. Moreover, although we
are not inclined to accept that the theory respondent put forth
at trial was included in respondent's position from the outset of
the proceedings, even if we were to assume that it was, we would
not find respondent's position substantially justified.
3 We note that respondent never pleaded the duty of
consistency as an affirmative defense in the proceeding before
this Court, as required by Rule 39.
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