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copy of the second check as evidence that the first check was
never cashed. When respondent did receive adequate
substantiation from petitioner that petitioner did not receive
the money, respondent conceded the issue. It was reasonable for
respondent to rely on the third party payer information and to
request proof from petitioner that he did not receive the amount
reported. Sher v. Commissioner, 861 F.2d 131 (5th Cir. 1988),
affg. 89 T.C. 79 (1987). Respondent was under no obligation to
concede the case prior to receiving the documentation which
proved petitioner's contentions.
Based on the record, we find that respondent's position was
substantially justified. Consequently, petitioner’s motion will
be denied.
Reviewed and adopted as the report of the Small Tax Case
Division.
An appropriate order and
decision will be entered.
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Last modified: May 25, 2011