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respondent with all relevant requested information until April
14, 1998. Therefore, no settlement could have been reached prior
to April 14, 1998. See Salopek v. Commissioner, T.C. Memo. 1998-
385. When respondent ultimately received the information, the
Appeals officer concluded that petitioners were entitled to a
refund and forwarded a proposed settlement to petitioners.
Respondent did not spend an unreasonable amount of time reviewing
the information and proposing a settlement to petitioner.5
Although the proposed settlement was ultimately rejected by the
associate chief of the IRS Appeals Office and the case was
forwarded to District Counsel, the time respondent spent
reviewing the proposed settlement was not unreasonable.6
Respondent should not have to bear the litigation costs for a
reasonable period of time it may take to review documentation
and/or modify his position. See Harrison v. Commissioner, 854
F.2d 263, 266 (7th Cir. 1988), affg. T.C. Memo. 1987-52.
Respondent concedes that his position was not substantially
justified after the calendar call on May 18, 1998, but has not
explained what additional facts rendered the position any more or
5 Respondent received the requested information from
petitioners on Apr. 14, 1998, and proposed a settlement on May 1,
1998.
6 Petitioners’ counsel agreed to the proposed settlement on
May 1, 1998, and was informed that the proposed settlement had
been rejected by the associate chief of the Internal Revenue
Service (IRS) Appeals Office on May 11, 1998.
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