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separately to allow respondent to change a position previously
taken, Huffman v. Commissioner, supra at 1144-1147, it appears in
this case that respondent essentially asserted the same position
in both the notice of deficiency and the answer.
More specifically, respondent's position was that petitioner
had not fully substantiated claimed expenditures, their
deductibility, or their business purpose. Therefore, in the
answer respondent denied petitioner's allegations that it had
paid or incurred all the expenses in dispute as ordinary and
necessary business expenses. In respondent's answer, it is
further stated that petitioner had provided insufficient
information to prove that it was an agent of Ohanesian and the
related entities.
The administrative and litigation positions of respondent
are substantially justified if they have a reasonable basis in
both law and fact. E.g., Anthony v. United States, 987 F.2d 670,
674 (10th Cir. 1993); Norgaard v. Commissioner, 939 F.2d 874, 881
(9th Cir. 1991), affg. in part and revg. in part T.C. Memo. 1989-
390; Powers v. Commissioner, supra at 472. For a position to be
substantially justified, "substantial evidence" must exist to
support it. Pierce v. Underwood, 487 U.S. 552, 564 (1988).
"That phrase does not mean a large or considerable amount of
evidence, but rather 'such relevant evidence as a reasonable mind
might accept as adequate to support a conclusion.'" Id. at 564-
565 (quoting Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229
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