Robert L. and Joanne Tammaro - Page 12




                                       - 12 -                                         
          requirements of section 7430(c)(4)(A).  Petitioner will                     
          nevertheless fail to qualify as the prevailing party if                     
          respondent can establish that respondent’s position in the court            
          and administrative proceedings was substantially justified.  See            
          sec. 7430(c)(4)(B).                                                         
               B.  Substantial Justification                                          
               The Commissioner's position is substantially justified if,             
          based on all of the facts and circumstances and the legal                   
          precedents relating to the case, the Commissioner acted                     
          reasonably.  See Pierce v. Underwood, 487 U.S. 552 (1988); Sher             
          v. Commissioner, 89 T.C. 79, 84 (1987), affd. 861 F.2d 131 (5th             
          Cir. 1988).  In other words, to be substantially justified, the             
          Commissioner's position must have a reasonable basis in both law            
          and fact.  See Pierce v. Underwood, supra; Rickel v.                        
          Commissioner, 900 F.2d 655, 665 (3d Cir. 1990), affg. in part and           
          revg. in part on other grounds 92 T.C. 510 (1989).  A position is           
          substantially justified if the position is "justified to a degree           
          that could satisfy a reasonable person".  Pierce v. Underwood,              
          supra at 565 (construing similar language in the Equal Access to            
          Justice Act).  Thus, the Commissioner's position may be incorrect           
          but nevertheless be substantially justified "’if a reasonable               
          person could think it correct’".  Maggie Management Co. v.                  
          Commissioner, 108 T.C. 430, 443 (1997) (quoting Pierce v.                   
          Underwood, supra at 566 n.2).                                               






Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  Next

Last modified: May 25, 2011