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1147. In the instant setting, however, when these positions are
the same, we evaluate their reasonableness.
Whether the Commissioner's position was substantially
justified turns on a finding of reasonableness, based on the
facts and circumstances of the case, as well as on any legal
precedents that may relate thereto. Nalle v. Commissioner,
55 F.3d 189, 191 (5th Cir. 1995), affg. T.C. Memo. 1994-182;
Coastal Petroleum Refiners, Inc. v. Commissioner, 94 T.C. 685,
688-696 (1990). We ask ourselves "whether * * * [the
Commissioner] knew or should have known that her position was
invalid at the onset". Nalle v. Commissioner, supra at 191. For
petitioners to prevail, respondent's position, in fact as well as
law, must not have been "justified to a degree that could satisfy
a reasonable person." Pierce v. Underwood, supra at 565.
Whether the Commissioner's position has a reasonable basis in
fact and law turns in part on whether there is "substantial
evidence" to support it. Id. at 564-565; Powers v. Commissioner,
supra at 473. The fact that the Commissioner concedes an issue,
in and of itself, does not mean that the Commissioner's position
was not substantially justified within the meaning of section
7430(c)(4)(A)(i). Sokol v. Commissioner, 92 T.C. 760, 767
(1989). It remains, however, a relevant factor to consider in
determining the degree of the Commissioner's justification.
Estate of Perry v. Commissioner, 931 F.2d 1044, 1046 (5th Cir.
1991); Powers v. Commissioner, supra at 471.
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