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Whether the position of the United States was “not
substantially justified” turns on an analysis of all the facts
and circumstances, as well as any relevant legal precedents.
Coastal Petroleum Refiners, Inc. v. Commissioner, 94 T.C. 685,
688 (1990); Sher v. Commissioner, 89 T.C. 79, 84 (1987), affd.
861 F.2d 131 (5th Cir. 1988). A position is substantially
justified if it is justified to a degree that could satisfy a
reasonable person or it has a reasonable basis in both law and
fact. Pierce v. Underwood, 487 U.S. 552, 565, 566 n.2 (1988);
Wilkes v. United States, __ F.3d __, __ (11th Cir., Apr. 22,
2002); Maggie Mgmt. Co. v. Commissioner, supra at 443; Livingston
v. Commissioner, T.C. Memo. 2000-387. The fact that the United
States loses or concedes issues is not determinative as to
whether the taxpayer is entitled to an award of reasonable
litigation costs. Sokol v. Commissioner, 92 T.C. 760, 767
(1989); Wasie v. Commissioner, 86 T.C. 962, 968-969 (1986).
Petitioner generally argues that respondent’s position was
not substantially justified because no position against relief
from joint and several liability for petitioner was reasonable
under former section 6013(e)8 or section 6015, which replaced
8Former sec. 6013(e) provided that a spouse could be
relieved of tax liability if the spouse proved: (1) A joint
return was filed; (2) the return contained a substantial
understatement of tax attributable to grossly erroneous items of
the other spouse; (3) in signing the return, the spouse seeking
relief did not know, and had no reason to know, of the
(continued...)
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