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Appeals to which appeal lies has already passed upon the issue
before us, efficient and harmonious judicial administration calls
for us to follow the decision of that court." Golsen v.
Commissioner, 54 T.C. 742, 757 (1970), affd. 445 F.2d 985 (10th
Cir. 1971).
Conclusion
On this record, the Court concludes that respondent's
position on the substantive issues in the instant case had no
basis in fact or law at the time respondent issued the notices of
deficiency or during the litigation of this case.10 It follows
that respondent's position was not substantially justified either
when respondent issued the notices of deficiency or during the
litigation herein. Accordingly, the Court holds that petitioners
are entitled to an award for administrative and litigation costs
under section 7430. Petitioners' motion, therefore, will be
granted.
9(...continued)
substantially justified because it was supported by Hayes v.
Commissioner, T.C. Memo. 1995-151, and Levien v. Commissioner,
103 T.C. 120 (1994), affd. without published opinion 77 F.3d 497
(11th Cir. 1996). Respondent overlooks the fact that both of
these cases applied the "economic reality" test rather than the
"worst-case scenario" test, and that neither case was appealable
in the Sixth Circuit.
10 Both Emershaw v. Commissioner, supra, and Martuccio v.
Commissioner, supra, were decided by the Court of Appeals before
respondent's issuance of the notices of deficiency.
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