Estate of Leon Spear, Deceased, Jeannette Spear, Harvey Spear, and Robin Spear, Administrators, and Jeannette Spear - Page 8

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          the taxpayer receives the notice of the decision of the Internal            
          Revenue Service Office of Appeals, or (ii) the date of the notice           
          of deficiency.  Sec. 7430(c)(7).  Respondent's position in the              
          notice of deficiency and in the answer was that the decedent and            
          Mrs. Spear had no cash hoard and were liable for the addition to            
          tax for fraud.  Thus, in this case, respondent's position in both           
          the judicial and the administrative proceeding was the position             
          taken in the notice of deficiency.                                          
               2.   Substantially Justified Standard                                  
               The substantially justified standard requires that                     
          the Government's position be justified to a degree that would               
          satisfy a reasonable person.  Pierce v. Underwood, 487 U.S. 552,            
          565 (1988); Rickel v. Commissioner, 900 F.2d 655, 665 (3d Cir.              
          1990), affg. in part and revg. in part on other grounds 92 T.C.             
          510 (1989).  That standard applies to motions for litigation                
          costs under section 7430.  Nicholson v. Commissioner, 60 F.3d               
          1020, 1025-1026 (3d Cir. 1995), revg. and remanding T.C. Memo.              
          1994-280.  To be substantially justified, the Commissioner's                
          position must have a reasonable basis in both law and fact.                 
          Pierce v. Underwood, supra; Nicholson v. Commissioner, supra at             
          1026.  For a position to be substantially justified, there must             
          be "substantial evidence" to support it.  Pierce v. Underwood,              

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