- 31 -
Accordingly, we find that petitioners have failed to meet their
burden of proof on this issue.20
Our conclusion is not diminished by the fact that respondent
ultimately conceded this matter in petitioners' favor prior to
trial. The determination of whether respondent's position was
substantially justified is based on all the facts and
circumstances surrounding a proceeding; the fact that respondent
ultimately concedes or loses a case is not determinative. See
Wasie v. Commissioner, 86 T.C. 962, 968-969 (1986); DeVenney v.
Commissioner, 85 T.C. 927, 930 (1985).
2. Net Worth
Respondent contends that petitioners have failed to
demonstrate that they satisfied the net worth requirement of
section 7430(c)(4)(A)(iii).
To qualify as a prevailing party eligible for an award of
litigation costs, a taxpayer must establish that he or she has a
net worth that did not exceed $2 million "at the time the civil
action was filed".21 In the case of a husband and wife seeking
20
For similar reasons, we find that it was not unreasonable as
a matter of fact or law for respondent to contend in alternative
positions that the proceeds from the sale of the Algonquin
property should be adjusted between petitioners and Swansons'
Tool. Having carefully considered petitioners' arguments, we
find that they have not met their burden of proving that
respondent was not substantially justified on this point.
21
This requirement is set forth by implication in sec.
7430(c)(4), which states in pertinent part that:
(A) In general.--The term "prevailing party" means
any party in any proceeding to which subsection (a)
(continued...)
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