Maggie Management Company - Page 1

                                   108 T.C. No. 21                                    

                               UNITED STATES TAX COURT                                

                      MAGGIE MANAGEMENT COMPANY, Petitioner v.                        
                    COMMISSIONER OF INTERNAL REVENUE, Respondent                      

               Docket No. 8017-94.                     Filed June 11, 1997.           

                    P, a California corporation, filed a petition for                 
               redetermination before the enactment of the Taxpayer                   
               Bill of Rights 2 (TBR2), Pub. L. 104-168, 110 Stat.                    
               1452 (1996).  Among the amendments made to sec. 7430,                  
               I.R.C., by TBR2 was a change regarding the burden of                   
               proof.  Prior to amendment, sec. 7430, I.R.C., required                
               the taxpayer to prove that the Commissioner's position                 
               in the administrative and court proceedings was not                    
               substantially justified.  Sec. 7430, I.R.C., now                       
               requires that the Commissioner establish that the                      
               Commissioner's position in such proceedings was                        
               substantially justified.  This amendment is effective                  
               in the case of proceedings commenced after July 30,                    
               1996, the date of enactment of TBR2.                                   
                    P's case was consolidated for trial, briefing, and                
               opinion with that of Mr. and Mrs. O, with whom P had a                 
               business relationship.  The nature of this relationship                
               was litigated before a State court jury, which found in                

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