- 4 -
requirements for the award of reasonable litigation costs. We
shall first consider whether respondent's position was
substantially justified.
A position is substantially justified if it is justified to
a degree that could satisfy a reasonable person and has a
reasonable basis in both fact and law. Pierce v. Underwood, 487
U.S. 552, 565 (1988); Nalle v. Commissioner, 55 F.3d 189, 191
(5th Cir. 1995), affg. T.C. Memo. 1994-182; Swanson v.
Commissioner, 106 T.C. 76, 86 (1996). The determination of
reasonableness is based on all of the facts and circumstances
surrounding the proceedings. Nalle v. Commissioner, supra at
191. A position has a reasonable basis in fact if there is such
relevant evidence as a reasonable mind might accept as adequate
to support a conclusion. Pierce v. Underwood, supra at 564-565.
The inquiry must be based on the facts reasonably available to
the Commissioner when the position was maintained. Coastal
Petroleum Refiners, Inc. v. Commissioner, 94 T.C. 685, 689
(1990).
The fact that the Commissioner loses on the merits does not
establish that a position was not substantially justified, but it
is a factor to be considered. Nalle v. Commissioner, supra at
192; Wilfong v. United States, 991 F.2d 359, 364 (7th Cir. 1993);
Estate of Perry v. Commissioner, 931 F.2d 1044, 1046 (5th Cir.
1991); Powers v. Commissioner, 100 T.C. 457, 471 (1993). The
fact that the evidence favoring the Commissioner's position fails
Page: Previous 1 2 3 4 5 6 7 Next
Last modified: May 25, 2011