Raymond P. Corkrey and Megan B. Flom-Corkrey - Page 13




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          the administrative proceedings was substantially justified.  See            
          sec. 7430(c)(4)(B).                                                         
               The Commissioner's position is substantially justified if it           
          is "justified to a degree that could satisfy a reasonable person"           
          and has a "reasonable basis in both law and fact".  Pierce v.               
          Underwood, 487 U.S. 552, 565 (1988) (interpreting similar                   
          language in the Equal Access to Justice Act, 28 U.S.C. sec. 2412            
          (1988)); see also Maggie Management Co. v. Commissioner, 108 T.C.           
          430, 443 (1997).  A position has a reasonable basis in fact if              
          there is relevant evidence that a reasonable mind might accept as           
          adequate to support a conclusion.  See Pierce v. Underwood, supra           
          at 564-565.  Accordingly, in deciding whether the Commissioner              
          acted reasonably, this Court must "consider the basis for the               
          Commissioner's legal position and the manner in which the                   
          position was maintained."  Wasie v. Commissioner, 86 T.C. 962,              
          969 (1986).                                                                 
               The fact that the Commissioner eventually loses or concedes            
          the case is not conclusive as to whether the taxpayer is entitled           
          to an award of administrative costs.  See Sokol v. Commissioner,            
          92 T.C. 760, 767 (1989); Wasie v. Commissioner, supra at 968-969.           
          It remains, however, a relevant factor to consider in deciding              
          the degree of the Commissioner's justification.  See Estate of              
          Perry v. Commissioner, 931 F.2d 1044, 1046 (5th Cir. 1991);                 
          Powers v. Commissioner, 100 T.C. 457, 470, 472 (1993), affd. in             






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