Michael O'Keefe Sowell - Page 8

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          proceeding, respondent is considered to have taken a position on            
          the date the notice of deficiency was issued, November 29, 2000.            
               Respondent’s position with regard to a request for                     
          litigation costs is generally the position taken in the answer.             
          Huffman v. Commissioner, 978 F.2d 1139, 1144-1147 (9th Cir.                 
          1992).  Here, because petitioner elected to have the case heard             
          under section 7463, no answer was required of respondent.  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.  Respondent’s position was that petitioner had $5,482 in              
          gambling income in 1998 that had not been reported.  The Court,             
          therefore, simply considers whether such position was                       
          substantially justified.  Maggie Mgmt. Co. v. Commissioner, 108             
          T.C. 430, 442-443 (1997); Pittman v. Commissioner, T.C. Memo.               
               Whether the Commissioner'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); Sher v. Commissioner, 89 T.C. 79, 84 (1987), affd. 861              

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