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was substantially justified. Sec. 7430(c)(4)(B). Respondent
concedes that petitioner prevailed with respect to the issues
presented and meets the applicable net worth requirement but
contends that his position was substantially justified.
Whether respondent’s position was substantially justified is
to be resolved by applying a reasonableness standard. Pierce v.
Underwood, 487 U.S. 552, 564 (1988); Sher v. Commissioner, 89
T.C. 79, 84 (1987), affd. 861 F.2d 131 (5th Cir. 1988).
Respondent’s position is reasonable if the position had a
reasonable basis in both fact and law. Norgaard v. Commissioner,
939 F.2d 874, 881 (9th Cir. 1991), affg. in part and revg. in
part T.C. Memo. 1989-390. The fact that respondent concedes a
case does not automatically mean that his position was not
substantially justified. Sokol v. Commissioner, 92 T.C. 760, 767
(1989). In determining the reasonableness of respondent’s
position, the Court may consider all relevant factors. Rutana v.
Commissioner, 88 T.C. 1329, 1333 (1987).
To decide whether respondent’s position was substantially
justified, the Court must first identify when respondent is
considered to have taken a position and then decide whether the
position taken from that day forward was substantially justified.
In general, we bifurcate our analysis and consider separately the
positions taken in the administrative proceeding and the judicial
proceeding. Huffman v. Commissioner, 978 F.2d 1139, 1148 (9th
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