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In this case, respondent's position on each of these dates
was the same. More specifically, until Mr. Romero conceded the
case in response to the FDIC communication dated August 9, 1996,
the position of respondent was that the discharge of indebtedness
reported on the information returns filed with respondent
represented taxable income to petitioner.
(1) The Administrative Proceeding
We begin with petitioner's contention that respondent's
position was not substantially justified at the time that the
notice of deficiency was issued. Respondent contends to the
contrary. We agree with petitioner.
Our conclusion that respondent's position was not
substantially justified at the time that the notice of deficiency
was issued is not based on any one particular factor; rather, our
conclusion is based on the totality of the facts and
circumstances present in this case. The following facts and
circumstances are those that we think are particularly
significant in cumulatively tipping the scales in petitioner's
favor.
The deficiency determined by respondent in the notice of
deficiency is predicated on an adjustment to income in the amount
of $1,009,815. Virtually all of this amount, i.e., $1,004,812,
represents discharge-of-indebtedness income. Such discharge-of-
indebtedness income originates from four Forms 1099-G, each of
which is for the exact same amount, i.e., $251,203. Under these
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