- 7 - Petitioner must also establish that he exhausted the administrative remedies available to him within the IRS and that he did not unreasonably protract the proceedings. See sec. 7430(b)(1), (4). Petitioner bears the burden of proof with respect to each of the preceding requirements. See Rule 232(e). Whether the Commissioner's position is substantially justified depends upon a finding of reasonableness based upon both law and fact. See Pierce v. Underwood, 487 U.S. 552, 565 (1988); Powers v. Commissioner, 100 T.C. 457, 470 (1993), affd. in part, revd. in part on another issue and remanded 43 F.3d 172 (5th Cir. 1995). The phrase "substantially justified" does not mean justified to a high degree but "'justified in substance or in the main'--that is, justified to a degree that could satisfy a reasonable person". Pierce v. Underwood, supra at 565. The taxpayer need not show bad faith to establish that the Commissioner's position was not substantially justified for purposes of a motion for administrative or litigation costs under section 7430. See Estate of Perry v. Commissioner, 931 F.2d 1044, 1046 (5th Cir. 1991); Powers v. Commissioner, supra at 471. The Commissioner's concession of a case is a factor to be considered. See Powers v. Commissioner, supra. The fact, however, that the Commissioner eventually concedes the case is not by itself sufficient to establish that a position is unreasonable. See Estate of Merchant v. Commissioner, 947 F.2dPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011