- 8 - 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). Deciding whether the Commissioner’s position and conduct were reasonable necessarily requires considering the facts available to the Commissioner at that time. Coastal Petroleum Refiners, Inc. v. Commissioner, 94 T.C. 685, 689 (1990); DeVenney v. Commissioner, 85 T.C. 927, 930 (1985). The fact that the Commissioner eventually loses or concedes a case does not establish an unreasonable position. Sokol v. Commissioner, 92 T.C. 760, 767 (1989). Respondent's position in the notice of deficiency and in the answer was that The Fourth Dreamer had unsubstantiated expenditures which, because they were not proven to be ordinary and necessary business expenses, inured to the benefit of the two shareholders of record in 1995, one of whom was petitioner. Petitioner claims that, to have been substantially justified in his position, respondent must have been able to prove that petitioner actually received benefits which were constructive dividends from The Fourth Dreamer.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 Next
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