Phillip A. O'Bryon and Cyndie W. O'Bryon - Page 10

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          may include events preceding the date the notice of deficiency              
          was issued.  See Williford v. Commissioner, T.C. Memo. 1994-135.            
          The reasonableness of respondent's position and conduct                     
          necessarily requires considering what respondent knew at the                
          time.  See Rutana v. Commissioner, supra at 1334; DeVenney v.               
          Commissioner, supra at 930; Triplett v. Commissioner, T.C. Memo.            
          1998-313.  We ask whether respondent knew or should have known              
          that his position was invalid at the onset.  See Nalle v.                   
          Commissioner, 55 F.3d 189, 191 (5th Cir. 1995), affg. T.C. Memo.            
          1994-182; Estate of Williamson v. Commissioner, T.C. Memo. 1997-            
               For a position to be substantially justified, there must be            
          substantial evidence to support it.  See Maggie Management Co. v.           
          Commissioner, 108 T.C. at 443.  It does not require a large or              
          considerable amount of evidence, but rather such relevant                   
          evidence as a reasonable mind might accept as adequate to support           
          a conclusion.  See Pierce v. Underwood, supra at 564-565 (citing            
          Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229 (1938)).                 
               We have previously adopted an issue-by-issue approach to the           
          awarding of costs under section 7430, apportioning the requested            
          awards between those issues for which respondent was                        
          substantially justified and those issues for which respondent was           
          not substantially justified.  See Swanson v. Commissioner, supra            
          at 102; Austin v. Commissioner, T.C. Memo. 1997-157.  We follow             

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