- 10 -
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-
77.
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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