Donald C. Richardson and Rita M. Allaire - Page 12

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          1148 (9th Cir. 1992), affg. in part, revg. in part and remanding            
          T.C. Memo. 1991-144.                                                        
               Respondent takes a position in an administrative proceeding            
          as of the earlier of the date the taxpayer receives an IRS                  
          Appeals decision or the Commissioner sends the notice of                    
          deficiency.  Sec. 7430(c)(7)(B).  Respondent's position in the              
          administrative proceeding was established on March 13, 1997, when           
          the statutory notices of deficiency were mailed.  Respondent took           
          a position in the judicial proceeding in these cases on August              
          12, 1997, when respondent's answers were filed.  Sec.                       
          7430(c)(7)(A); California Marine Cleaning, Inc. v. Commissioner,            
          T.C. Memo. 1998-311; Kahn-Langer v. Commissioner, T.C. Memo.                
          1995-527; Lockett v. Commissioner, T.C. Memo. 1994-144 (citing              
          Huffman v. Commissioner, supra at 1148); Amann v. Commissioner,             
          T.C. Memo. 1993-542, affd. per curiam without published opinion             
          40 F.3d 1235 (1st Cir. 1994).  In this instance it is not                   
          necessary to analyze respondent's position separately on each of            
          these dates as respondent's position was the same at both times.            
          Swanson v. Commissioner, 106 T.C. 76, 87 (1996).                            
               We now consider whether respondent's position in the                   
          administrative and judicial proceedings was substantially                   
          justified.  We analyze respondent's position in the context of              
          what caused respondent to take that position.  Lennox v.                    
          Commissioner, 998 F.2d 244, 247-249 (5th Cir. 1993), revg. in               

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