Nadeem Chowdhury and Brenda S. Garth Chowdhury - Page 4

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          Court generally considers the reasonableness of respondent’s                
          position from the date the answer was filed.  Huffman v.                    
          Commissioner, 978 F.2d 1139, 1148 (9th Cir. 1992), affg. in part,           
          revg. in part, and remanding T.C. Memo. 1991-144.  No answer was            
          required in this case which was tried under the small tax case              
          procedures.  Rule 175(b).  Accordingly, respondent’s position for           
          the purpose of the motion is the position maintained by                     
          respondent during the pendency of this case.  There is nothing in           
          the record that suggests that respondent’s position changed from            
          that taken in the notice of deficiency, so these positions are,             
          in effect, the same.                                                        
               Whether respondent's position was substantially justified              
          turns on a finding of reasonableness, based upon all the facts              
          and circumstances, as well as the legal precedents relating to              
          the case.  Pierce v. Underwood, 487 U.S. 552, 565 (1988); Swanson           
          v. Commissioner, 106 T.C. 76, 86 (1996).  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.  The Court must "consider the basis for                       
          respondent's legal position and the manner in which the position            
          was maintained."  Wasie v. Commissioner, 86 T.C. 962, 969 (1986).           
          The reasonableness of respondent's position and conduct                     
          necessarily requires considering the facts available to                     
          respondent at that time.  Coastal Petroleum Refiners, Inc. v.               

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