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not allowed a section 362 basis adjustment in order to protect
the revenue should the Bowdens prevail on their issue.
In its motion, however, petitioner does not address whether
respondent's position with respect to the adjustments contained
in the notice of deficiency was substantially justified.
Petitioner argues that because respondent failed to acknowledge
the section 362 basis adjustment until the amended answer to the
amendment to petition was filed, respondent's position was
unreasonable and petitioner is entitled to litigation costs. We
disagree. Petitioner does not explain, nor does the record
suggest, how the section 362 basis adjustment relates to the
deficiency amounts contained in the notice of deficiency. We
therefore find that respondent's position regarding the basis
adjustments to be irrelevant to petitioner's motion.
Even if we were to consider respondent's position with
respect to the section 362 basis adjustments, we have recognized
that the Government may, at times, take alternative or
inconsistent positions with respect to different taxpayers. Rule
31(c); Dixson Intl. Serv. Corp. v. Commissioner, 94 T.C. 708, 717
(1990); Barkley Co. v. Commissioner, 89 T.C. 66, 68 (1987).
There are limits, however, to the propriety of taking
inconsistent positions. If a so-called inconsistent position has
no possible chance of success, it has been held to be
unreasonable. Dixson Intl. Serv. Corp. v. Commissioner, supra.
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