James Tinnell - Page 8

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          law.  Norgaard v. Commissioner, 939 F.2d 874, 881 (9th cir.                 
          1991), affg. in part and revg. in part T.C. Memo. 1989-390;                 
          Maggie Mgmt. Co. v. Commissioner, 108 T.C. 440, 443 (1997).                 
          Although the Commissioner’s litigating position may have been               
          incorrect in hindsight,5 it is substantially justified “if a                
          reasonable person could think it correct”.  Pierce v. Underwood,            
          supra at 566 n.2.  “Thus, whether respondent acted reasonably in            
          the instant case ultimately turns upon those available facts                
          which formed the basis for the position taken in the notice of              
          deficiency and during the litigation, as well as upon any legal             
          precedents related to the case.”  Maggie Mgmt. Co. v.                       
          Commissioner, supra at 443.                                                 
               When a taxpayer seeks an award of litigation costs under               
          section 7430, we look at the Commissioner’s answer to ascertain             
          his initial litigating position, and we must decide whether the             
          Commissioner’s position was reasonable by examining the facts               
          reasonably available to the Commissioner at the time he asserted            
          his position in his answer.  Maggie Mgmt. Co. v. Commissioner,              
          supra at 443; DeVenney v. Commissioner, 85 T.C. 927, 930 (1985).            
          In Tinnell I, respondent’s litigating position with respect to              

               5The fact that the Commissioner eventually loses a case does           
          not by itself establish that the Commissioner’s position was                
          unreasonable, but the litigating result is a factor that may be             
          considered.  See Anthony v. United States, 987 F.2d 670, 674                
          (10th Cir. 1993); Estate of Perry v. Commissioner, 931 F.2d 1044,           
          1046 (5th Cir. 1991); Sokol v. Commissioner, 92 T.C. 760, 767               

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