- 9 - arguments presented by respondent that were not addressed and rejected in Butts and Mosteirin I. Additionally, no factual controversy remained after Mosteirin I. Respondent knew, and indeed agreed, that the facts were indistinguishable from the prior Allstate cases. Given that these facts were available to respondent, legal precedents did not substantially support respondent's position. Furthermore, we do not agree that it was necessary for respondent to try the pension and self-employment tax issues together with the classification issue.5 It is time for respondent to suffer the consequences of continually advocating a position previously judicially disapproved. We conclude that respondent's position regarding the classification issue was not substantially justified.6 5 We do not find convincing respondent's bald assertion that it was necessary. 6 Respondent also argues that the Government was substantially justified in litigating the classification issue because the Court correctly articulated the applicable legal standard in Butts v. Commissioner, T.C. Memo. 1993-478, affd. per curiam 49 F.3d 713 (11th Cir. 1995), and Smithwick v. Commissioner, T.C. Memo 1993-582, affd. per curiam sub nom. Butts v. Commissioner, 49 F.3d 713 (11th Cir. 1995), as one of the right to control the insurance agency, but we did not correctly apply the legal test to the NOA's in those two cases. Respondent's argument relies on our statement in Lozon I that respondent was half right. Respondent understands this statement to mean that the Court agreed that we misapplied the test. Respondent is mistaken. In stating that respondent was half right, we meant that respondent was correct in noting that the Court articulated the applicable legal standard, but was incorrect in asserting that we misapplied the test. Thus, (continued...)Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Next
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