James H. Swanson and Josephine A. Swanson - Page 18

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          Commissioner, 89 T.C. 79, 84 (1987), affd. 861 F.2d 131 (5th Cir.           
          1988).  Thus, a position that is "substantially justified" is one           
          that is "justified to a degree that could satisfy a reasonable              
          person" or that has a "reasonable basis both in law and fact."              
          Pierce v. Underwood, 487 U.S. 552, 565 (1988) (internal quote               
          marks omitted) (defining "substantially justified" in the context           
          of the EAJA).                                                               
               Petitioners have not sought an award of administrative costs           
          in this matter.  Accordingly, we need only examine the question             
          of whether respondent's litigation position was substantially               
          justified.8                                                                 
               Respondent argues that we may not consider positions she               
          took prior to the filing of the answer in determining whether her           
          litigation position was substantially justified.  In support,               
          respondent cites, among other cases,9 Huffman v. Commissioner,              
          978 F.2d 1139 (9th Cir. 1992), affg. in part and revg. in part              
          T.C. Memo. 1991-144.                                                        



          8                                                                           
               Respondent's litigation position for purposes of this matter           
          is that taken on Nov. 13, 1992, the date the answer was filed.              
          See Han v. Commissioner, T.C. Memo. 1993-386.                               
          9                                                                           
               To the extent respondent has cited for support cases which             
          discuss sec. 7430 prior to its amendment in 1986 by TRA sec.                
          1551, 100 Stat. 2085, 2752, and in 1988 by the Technical and                
          Miscellaneous Revenue Act of 1988, Pub. L. 100-647, sec. 6239,              
          102 Stat. 3342, 3743, we find them to be inapposite.  See Sansom            
          v. United States, 703 F. Supp. 1505 (N.D. Fla. 1988).                       






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