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respondent's position in the court proceeding was not
substantially justified.
C. Respondent's Position in the Court Proceeding
Whether respondent's position was not substantially
justified is a question of fact. We resolve such issue by the
application of a reasonableness standard. See Pierce v.
Underwood, 487 U.S. 552, 565 (1988) (construing similar language
in the Equal Access to Justice Act (EAJA), 28 U.S.C. sec. 2412
(1988)); see also Maggie Management Co. v. Commissioner, 108 T.C.
, , (June 11, 1997) (slip op. at 18-19); Sokol v.
Commissioner, 92 T.C. 760, 763 n.7 (1989); Sher v. Commissioner,
89 T.C. 79, 84 (1987), affd. 861 F.2d 131 (5th Cir. 1988).
The position of the United States that must be examined
against the reasonableness standard is the position taken by the
Commissioner in the answer to the petition and thereafter.
Bertolino v. Commissioner, 930 F.2d 759, 761 (9th Cir. 1991);
Sher v. Commissioner, 861 F.2d at 134-135; Maggie Management Co.
v. Commissioner, supra (slip op. at 19); see sec. 7430(c)(7)(A).
The fact that the Commissioner eventually loses a case does
not, by itself, establish that the Commissioner's position was
unreasonable. Estate of Perry v. Commissioner, 931 F.2d 1044,
1046 (5th Cir. 1991); Swanson v. Commissioner, 106 T.C. 76, 94
(1996); Powers v. Commissioner, 100 T.C. 457, 471 (1993).
In the present case, respondent's position in the court
proceeding was that petitioner's Transfer Refund did not qualify
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