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administrative proceeding when she issued the notice of
deficiency to petitioner. Sec. 7430(c)(7)(B). Respondent took a
position in this proceeding when the Court filed respondent's
answer herein. Sec. 7430(c)(7)(A); Sher v. Commissioner, 89 T.C.
79 (1987), affd. 861 F.2d 131 (5th Cir. 1988). Ordinarily, we
consider the reasonableness of each of these positions
separately. Huffman v. Commissioner, 978 F.2d 1139, 1144-1147
(9th Cir. 1992), affg. in part, revg. in part, and remanding on
another issue T.C. Memo. 1991-144. In the instant setting,
however, when these positions are the same, we evaluate their
reasonableness together.
Whether the Commissioner's position was not substantially
justified turns on the finding of reasonableness, based on the
facts and circumstances of the case, as well as on any legal
precedents that may relate thereto. Nalle v. Commissioner, 55
F.3d 189, 191 (5th Cir. 1995), affg. T.C. Memo. 1994-182; Coastal
Petroleum Refiners, Inc. v. Commissioner, 94 T.C. 685, 688-696
(1990). We ask ourselves "whether * * * [the Commissioner] knew
or should have known that her position was invalid at the onset".
Nalle v. Commissioner, supra at 191.
As related in our principal opinion herein, this estate
secured a 6-month extension of time until September 30, 1988, for
filing its Federal estate tax return because of an ongoing
dispute between the estate and decedent's surviving husband
regarding the nature, amount, and valuation of assets that were
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