Pramod and Raj Tandon - Page 12

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              The relevant inquiry is "whether * * * [the Commissioner]              
          knew or should have known that [his] position was invalid at the            
          onset".  Nalle v. Commissioner, 55 F.3d 189, 191 (5th Cir. 1995),           
          affg. T.C. Memo. 1994-182.  We look to whether the Commissioner's           
          position was reasonable given the available facts and                       
          circumstances at the time that the Commissioner takes his                   
          position.  Maggie Management Co. v. Commissioner, supra at 443;             
          DeVenney v. Commissioner, 85 T.C. 927, 930 (1985).                          
               The fact that the Commissioner eventually loses or concedes            
          a case does not establish an unreasonable position.  Bouterie v.            
          Commissioner, 36 F.3d 1361, 1367 (5th Cir. 1994), revg. on other            
          grounds T.C. Memo. 1993-510; Estate of Perry v. Commissioner, 931           
          F.2d 1044, 1046 (5th Cir. 1991); Sokol v. Commissioner, 92 T.C.             
          760, 767 (1989).  However, the Commissioner's concession does               
          remain a factor to be considered.  Powers v. Commissioner, 100              
          T.C. 457, 471 (1993), affd. in part, revd. in part and remanded             
          on another issue 43 F.3d 172 (5th Cir. 1995).                               
               As relevant herein, the position of the United States that             
          must be examined against the substantial justification standard             
          with respect to the recovery of administrative costs is the                 
          position taken by respondent as of the date of the notice of                
          deficiency.  Sec. 7430(c)(7)(B).  The position of the United                
          States that must be examined against the substantial                        
          justification standard with respect to the recovery of litigation           
          costs is the position taken by respondent in the answer to the              




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