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substantially justified, however, a taxpayer is not a “prevailing
party” for purposes of section 7430. See sec. 7430(c)(4)(B).4
After concessions by respondent, the remaining issues are:
(1) Whether the position of the United States in the proceeding
was substantially justified, and (2) whether the amounts of
administrative and litigation costs claimed by petitioners are
reasonable. Because we hold that respondent’s position was
substantially justified, we need not consider respondent’s
alternative argument that the administrative and litigation costs
requested by petitioners are not reasonable.
The substantially justified standard under section 7430 is
applied as of the separate dates respondent took positions in the
administrative and judicial proceedings. See sec. 7430(c)(7).
For purposes of administrative costs, the position of the United
States is that taken in an administrative proceeding as of the
earlier of the date of the receipt by the taxpayer of the notice
of decision by the Internal Revenue Service Office of Appeals or
the date of the notice of deficiency. See sec. 7430(c)(7)(B).
The position of the United States for purposes of litigation
costs refers to the position of the United States in a judicial
4 Because the petition in this case was filed after July
30, 1996, under sec. 7430 the burden is on respondent to show
that the Government’s position was substantially justified. See
Taxpayer Bill of Rights 2, Pub. L. 104-168, sec. 701(d), 110
Stat. 1452, 1464 (1996); Maggie Management Co. v. Commissioner,
108 T.C. 430, 438 (1997).
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