- 22 -                                         
          (1938)).  Respondent's position may be incorrect but                        
          substantially justified "if a reasonable person could think it              
          correct".  Id. at 566 n.2.  Thus, whether respondent acted                  
          reasonably in the instant case ultimately turns upon those                  
          available facts which formed the basis for the position taken in            
          the notice of deficiency and during the litigation, as well as              
          upon any legal precedents related to the case.  DeVenney v.                 
          Commissioner, supra at 930; see Nalle v. Commissioner, 55 F.3d              
          189, 191-192 (5th Cir. 1995), affg. T.C. Memo. 1994-182; Coastal            
          Petroleum Refiners, Inc. v. Commissioner, 94 T.C. 685, 688                  
          (1990).                                                                     
               The fact that the Commissioner eventually loses or concedes            
          a case does not by itself establish that the position taken is              
          unreasonable.  Estate of Perry v. Commissioner, 931 F.2d 1044,              
          1046 (5th Cir. 1991); Swanson v. Commissioner, 106 T.C. 76, 94              
          (1996).  However, it is a factor that may be considered.  Estate            
          of Perry v. Commissioner, supra at 1046; Powers v. Commissioner,            
          supra at 471.                                                               
               We conclude that petitioner has failed to prove that                   
          respondent's position did not have a reasonable basis in fact and           
          law and was not strongly supported by substantial evidence.                 
          Although petitioner claimed to be a mere agent or conduit of                
          Ohanesian and SRI in the administrative proceeding before the IRS           
          and in the judicial proceeding before the Tax Court, petitioner             
          had taken the exactly opposite tack in its State court suit.  In            
Page:  Previous   11   12   13   14   15   16   17   18   19   20   21   22   23   24   25   26   27   28   29   30   NextLast modified: May 25, 2011