- 13 -
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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