Laura E. Austin - Page 10

          position taken in the administrative proceedings as of the                  
          earlier of the date of receipt of the appeals decision by the               
          taxpayer or the date of the notice of deficiency.  Sec.                     
          7430(c)(7)(B).  Section 7430(c)(5) defines administrative                   
          proceeding as any procedure or other action before the Internal             
          Revenue Service.  In this case respondent took a position in the            
          administrative proceeding as of June 3, 1994, the date of the               
          notice of deficiency was issued.4  See sec. 7430(c)(7)(B)(ii).              
               The position taken by the United States, for purposes of               
          litigation costs, refers to the position of the United States in            
          a judicial proceeding.  Sec. 7430(c)(7)(A).  Respondent took                
          positions in the judicial proceedings herein on the dates                   
          respondent filed her answers; i.e., September 26, 1994, in the              
          first docket and October 24, 1994, in the second.  Huffman v.               
          Commissioner, supra.  Although ordinarily the reasonableness of             
          each of those positions is considered separately to allow                   
          respondent to change her position, Huffman v. Commissioner, supra           
          at 1144-1147, it appears in this case that respondent took the              
          same positions in both the notice of deficiency and the answers.            
          More specifically, respondent's position was that petitioners               
          overstated deductions for travel and entertainment, overstated              

               4    The record does not show that a notice of decision of             
          the IRS Appeals Office was ever issued or received by petitioners           
          prior to the date of the notice of deficiency.  Therefore,                  
          respondent is considered to have taken a position in the                    
          administrative proceedings on the date the notice of deficiency             
          was issued.                                                                 

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