- 11 -
We first consider whether respondent's position was
substantially justified. For the reasons stated, infra, we find
that it was.
Whether respondent's position was substantially justified
depends on whether respondent's position and actions were
reasonable in light of the facts of the case and applicable
precedents. Bragg v. Commissioner, 102 T.C. 715, 716 (1994);
Powers v. Commissioner, 100 T.C. 457, 470-471 (1993), affd. in
part and revd. and remanded in part 43 F.3d 172 (5th Cir. 1995).
The fact that respondent concedes the case is not necessarily
indicative that a position is not substantially justified. Price
v. Commissioner, 102 T.C. 660, 662-665 (1994), affd. without
published opinion sub nom. TSA/THE Stanford Associates, Inc. v.
Commissioner, 77 F.3d 490 (9th Cir. 1996). A position is
"substantially justified" when it is "justified to a degree that
could satisfy a reasonable person." Pierce v. Underwood, 487
U.S. 552, 565 (1988).
Petitioners did not meet with respondent's auditing agent at
any time during the examination of their 1992 Federal income tax
return.
The principal issue in this case is one of substantiation.
Subsequent to the filing of the petition in this case on January
30, 1995, the parties diligently communicated with each other to
resolve the substantiation issue. We have set forth those
continuing communications supra. As soon as petitioners
submitted to respondent documentation to support their claimed
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
Last modified: May 25, 2011