- 9 -
supra at 564-565; Powers v. Commissioner, 100 T.C. 457, 473
(1993), affd. on this issue and revd. in part and remanded on
other issues 43 F.3d 172 (5th Cir. 1995), remanded 51 F.3d 34
(5th Cir. 1995).
The fact that the Commissioner eventually loses or concedes
the case does not in itself establish that a position is
unreasonable. Wilfong v. United States, 991 F.2d 359, 364 (7th
Cir. 1993). However, it is a factor to be considered. Estate of
Perry v. Commissioner, 931 F.2d 1044, 1046 (5th Cir. 1991);
Powers v. Commissioner, supra at 471. The taxpayer need not show
bad faith to establish that the Commissioner's position was not
substantially justified for purposes of a motion for litigation
costs under section 7430. Estate of Perry v. Commissioner,
supra; Powers v. Commissioner, supra.
C. Whether Respondent Had a Basis in Fact for the Position in
the Notice of Deficiency
1. Respondent's Investigation Before the Notice of
Deficiency
Respondent investigated this case before issuing the notice
of deficiency. Respondent's agents interviewed the decedent and
Mrs. Spear and sent document requests to them. Respondent
summoned third parties, reviewed public records, and examined the
decedent and Mrs. Spear's bank accounts and financial statements.
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