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In deciding whether petitioner is entitled to administrative
costs, the Court takes into account the information available to
respondent from the date the notice of deficiency was mailed and
from that point forward through the date respondent's answer was
filed in the legal proceeding. Between the time that the notice
of deficiency was mailed and the time respondent's answer was
filed, petitioner provided no records or pertinent documentation
to respondent. Accordingly, respondent was substantially
justified in maintaining the positions determined in the notice
of deficiency, and, therefore, respondent's position in the
administrative proceeding was substantially justified.
The Court next addresses the reasonableness of respondent's
position in the litigation aspects of the case. After the
petition was filed and before respondent filed the answer, there
were no contacts or efforts to settle the case between petitioner
and respondent. At the time the answer was filed, respondent did
not have sufficient information to consider that petitioner's
claims were properly substantiated. After respondent filed an
answer, an appeals conference was held with petitioner, and, as a
result of that conference, the case settled. On this record, as
soon as proper documentation was submitted to respondent by
petitioner, at the appeals conference with the appeals officer,
respondent allowed petitioner's claimed deductions, conceded that
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Last modified: May 25, 2011