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2. Substantially Justified Standard
A taxpayer must establish that the position of the United
States in the litigation was not substantially justified to be
entitled to an award for administrative and litigation costs.
Sec. 7430(c)(4)(A)(i). 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. Rickel v. Commissioner,
supra. Powers v. Commissioner, 100 T.C. 457, 470, 473 (1993),
affd. on this issue and revd. in part and remanded on other
issues 43 F.3d 172 (5th Cir. 1995).
To be substantially justified, the Commissioner's position
must have a reasonable basis in both law and fact. Pierce v.
Underwood, supra; Hanover Bldg. Matls., Inc. v. Guiffrida, 748
F.2d 1011, 1015 (5th Cir. 1984); Powers v. Commissioner, supra.
For a position to be substantially justified, there must be
substantial evidence to support it. Pierce v. Underwood,
supra at 564-565; Powers v. Commissioner, supra at 473.
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
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