Linda Marie Sherbo - Page 6




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          685, 688 (1990).  Respondent must prove that his position was               
          substantially justified.  See sec. 7430(c)(4)(B).  Although the             
          concession of a case is a factor to be considered in determining            
          whether a position is substantially justified, such concession is           
          not by itself sufficient to establish an unreasonable position.             
          See Estate of Merchant v. Commissioner, 947 F.2d 1390, 1395 (9th            
          Cir. 1991), affg. T.C. Memo. 1990-160; Powers v. Commissioner,              
          100 T.C. 457, 471 (1993), affd. on this issue, revd. in part and            
          remanded on other issues 43 F.3d 172 (5th Cir. 1995).                       
               Petitioner seeks only litigation costs in this matter;                 
          therefore, we must examine respondent's position in the judicial            
          proceeding.  See sec. 7430(c)(7)(A).  Respondent first took a               
          position in the judicial proceeding on the date respondent's                
          answer was filed--November 16, 1998.  See California Marine                 
          Cleaning, Inc. v. Commissioner, T.C. Memo. 1998-311; Kahn-Langer            
          v. Commissioner, T.C. Memo. 1995-527; Lockett v. Commissioner,              
          T.C. Memo. 1994-144 (citing Huffman v. Commissioner, 978 F.2d               
          1139, 1148 (9th Cir. 1992), affg. in part, revg. in part and                
          remanding on other issues T.C. Memo. 1991-144).                             
               Respondent contends the position of the United States was              
          substantially justified on the basis of the following information           
          the Internal Revenue Service possessed at the time the notice of            
          deficiency was issued:  (1) Both petitioner and Mr. Sherbo                  
          claimed earned income credit with respect to Liane on their 1995            





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