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supra, respondent's position was not supported by the relevant
legal precedent based on the facts available to respondent.7
Respondent contends that respondent's position did not
ignore the "worst-case scenario" standard but, rather,
acknowledged that it would apply to the instant case. Respondent
argues that the facts pertinent to the substantive issues in the
instant case could be readily distinguished from the facts in
Emershaw v. Commissioner, supra, and Martuccio v. Commissioner,
supra. Therefore, respondent contends that respondent's position
was substantially supported by legal precedent given the facts
available to respondent and, thus, was reasonable as a matter of
law and fact.
The Court agrees that respondent acknowledged the "worst-
case scenario" test should be applied to the facts of the instant
case. Nevertheless, respondent failed to sufficiently
distinguish the facts of the instant case from those in Emershaw
v. Commissioner, supra, and Martuccio v. Commissioner, supra, to
show that the result reached in the instant case should be
different from that in Emershaw and Martuccio. In fact, in the
opinion on the merits herein, this Court found that the sale-
7 In both Emershaw v. Commissioner, 949 F.2d 841 (6th Cir.
1991), affg. T.C. Memo. 1990-246, and Martuccio v. Commissioner,
30 F.3d 743 (6th Cir. 1994), revg. T.C. Memo. 1992-311, the Court
of Appeals held that, under the "worst-case scenario" test, the
taxpayers were not "protected from loss" within the meaning of
sec. 465(b)(4).
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