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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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