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representative. Respondent’s counsel did not have anything
useful to work with when filing the answer herein. But,
collectively, respondent’s employees were unreasonable in
creating the situation that led to respondent’s counsel not
having the substantiation when preparing the answer. Thus,
respondent’s counsel may have been reasonable, but respondent was
not.
Petitioners are not blameless. Petitioners’ representative
could have asked for an IDR or other listing of documents that
respondent needed, but apparently failed to do so. He should
have returned Ward’s telephone calls--but the only indication in
the record as to the purpose of these telephone calls is that
respondent wanted a limitations extension and not that respondent
wanted substantiation materials.
Petitioners’ case is not as strong as that of the taxpayers
in Powers v. Commissioner, supra.
The issue in Powers was whether the Commissioner’s position
was substantially justified where it was not based on any factual
information about the taxpayer and where the Commissioner had not
attempted to obtain information about the case before adopting
the position. Powers v. Commissioner, 100 T.C. at 478.
Specifically, this Court noted that the Commissioner’s position
lacked a reasonable basis in fact and law because: (1) The
Commissioner made no effort to contact the taxpayer during the 3
years allowed by section 6501 to assess tax or the 3 additional
years for which the taxpayer agreed to extend the period to
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