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to Rev. Rul. 74-150, 1974-1 C.B. 241 (which concluded that
unnecessary, albeit erroneous, information contained on a Form
2553 did not adversely effect the validity of the election), and
also contrary to the line of cases addressing the effective dates
of S corporation elections in situations where the taxpayers
omitted essential information from Forms 2553. Returning the
Form 2553 was consistent with the instructions in the manual,
which instructions were consistent with the body of law
previously discussed, see supra pp. 15-17, and cannot be
considered unreasonable under the circumstances.
We have observed in numerous opinions that the
Commissioner's concession of an issue is not determinative of
whether the Commissioner's position in the proceeding was
substantially justified, Sokol v. Commissioner, 92 T.C. 760, 767
(1989); Wasie v. Commissioner, 86 T.C. 962, 968-969 (1986), but
merely a factor to be considered, Estate of Perry v.
Commissioner, 931 F.2d 1044, 1046 (5th Cir. 1991).
After considering the surrounding circumstances, we find
that petitioner has failed to establish that respondent's
position disallowing the NTI passthrough loss claimed by
petitioner and Mrs. Dugan in 1991 (a portion of which was carried
back to 1988) because NTI's S corporation election was not
effective until 1993 was not substantially justified.
Consequently, petitioner cannot be considered a prevailing party
within the meaning of section 7430(a).
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