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the Commissioner's position and conduct requires considering what
the Commissioner knew at the time. See Rutana v. Commissioner,
88 T.C. 1329, 1334 (1987); DeVenney v. Commissioner, 85 T.C. 927,
930 (1985).
The fact that the Commissioner loses on the merits or
concedes the case does not establish that a position was not
substantially justified; however, it is a factor to be
considered. Powers v. Commissioner, 100 T.C. 457, 471 (1993).
The Court has adopted an issue-by-issue approach to section
7430, apportioning the requested awards between those issues for
which the Commissioner was and those issues for which the
Commissioner was not substantially justified. See Powers v.
Commissioner, 51 F.3d 34, 35 (5th Cir. 1995); Swanson v.
Commissioner, supra at 102; see also sec. 301.7430-5(c)(2),
Proced. & Admin. Regs. We follow that approach here and
separately discuss whether respondent's position on the
classification issue, pension issue, and self-employment tax
issue was not substantially justified.
1. Classification Issue
This Court, in Mosteirin II, ruled that the Commissioner was
substantially justified in litigating the employee versus
independent contractor issue in a case involving NOA's of
Allstate even though the Commissioner had unsuccessfully taken
the identical position in this Court twice before. We noted that
the motion for costs presented a close case and that our opinion
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