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Commissioner, 86 T.C. 962, 968-969 (1986). Petitioners bear the
burden of proof on this issue. Rule 232(e); Coastal Petroleum
Refiners, Inc. v. Commissioner, 94 T.C. 685, 688 (1990).
Respondent's litigation position is substantially justified if
it has a reasonable basis in both law and fact. Pierce v.
Underwood, 487 U.S. 552, 565 (1988). We believe the record in
this case establishes the overall reasonableness of respondent's
position with regard to the section 482 adjustment.
Petitioners argue that respondent's position regarding the
imputation of interest income under section 482 was not
substantially justified. Petitioners argue that: (1) The
deficiencies totaled $1,827,492, and the decisions of the Court
as to such deficiencies totaled $47,761.53; (2) after 12 years
of administrative proceedings and litigation, respondent
capitulated and agreed that the valuations of RAM Drilling stock
were 10 times too high; and (3) respondent conceded that the
interest on certain corporate notes should not have been 14
percent, and that respondent later conceded this issue in its
entirety, and stipulated that no interest should be imputed. In
essence, petitioners contend that because they prevailed so
overwhelmingly, they should be allowed to recover their full
costs. We disagree.
This Court has consistently held that a concession by
respondent is not determinative as to whether respondent's
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