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worth requirements of 28 U.S.C. section 2412(d)(2)(B) at the time
the petition in the case was filed. Sec. 7430(c)(4)(A).
However, a party shall not be treated as the prevailing party if
the United States establishes that the position of the United
States in the proceeding was substantially justified. Sec.
7430(c)(4)(B).
Respondent contends that the position of the United States
was substantially justified and that petitioners have not proved
that they exhausted their administrative remedies. Respondent
concedes that petitioners have satisfied the other requirements
of section 7430.
To decide whether respondent's position was substantially
justified, the Court must first identify the point in time at
which the United States is considered to have taken a position
and then decide whether the position taken from that date forward
was substantially justified. In general, we bifurcate our
analysis and look separately at the dates that respondent took a
position in the administrative proceeding and in the proceeding
in this Court. Sec. 7430(c)(7)(A) and (B); Huffman v.
Commissioner, 978 F.2d 1139, 1144 (9th Cir. 1992), affg. in part,
revg. in part and remanding T.C. Memo. 1991-144. In the instant
case, however, we may dispense with the bifurcated analysis
because respondent's position on each of these dates was the
same. Swanson v. Commissioner, 106 T.C. 76, 87 (1996).
Respondent took a position in the administrative proceeding when
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