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In some instances, an unexplained alternative and theoretically
inconsistent position could be totally misleading and cause an
unsophisticated taxpayer to spend needless time and effort trying
to comprehend the Government's position. This case, however,
does not present such a problem.
The issue of the Bowdens' gain from the section 351
transaction and the corresponding section 362 adjustments was the
subject of much correspondence and discussion between respondent
and petitioner. The Government's position was also outlined in
the revenue agent's report disclosed to petitioner on
September 5, 1995. The record reflects that the petitioner was
familiar with the issues as well as with the Government's
position on these issues from early on in the proceeding.
Accordingly, we find that petitioner has not established that
respondent's position was not substantially justified.
Because petitioner has not proven that respondent's position
was not substantially justified, we need not decide whether
petitioner's litigation costs are reasonable and whether
petitioner unreasonably protracted the court proceedings.
Petitioner's motion for litigation costs will be denied.
To reflect the foregoing,
An appropriate Order
and Decision will be entered.
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Last modified: May 25, 2011