- 9 -
party, however, if the Government establishes that “the position
of the United States” was substantially justified. See sec.
7430(c)(4)(B). The “position of the United States” is, in turn,
defined in section 7430(c)(7) as the position taken by the
Government in an administrative proceeding as of the earlier of:
(1) The date of receipt by the taxpayer of the notice of decision
of the Appeals Office, or (2) the date of the notice of
deficiency. Thus, prior to the issuance of a notice of
deficiency or an Appeals Office decision, the Government is not
considered as having taken any position. See, e.g., Richardson
v. Commissioner, T.C. Memo. 1991-427 (“we cannot consider the
conduct of the revenue agent prior to * * * [date of notice of
deficiency].”); Nathaniel v. United States, 69 AFTR 2d 456, 92-1
USTC par. 50,023 (E.D. Cal. 1991) ("The plain language of section
7430(c)(7) precludes the court from considering the position
taken by the United States in the administrative proceedings * *
* [prior to] the date of a notice of deficiency or the date of
the receipt by the taxpayer of a notice of a decision of the
Office of Appeals").
Respondent argues that because no notice of deficiency or
Appeals Office decision was ever issued to petitioners, no
“position of the United States” had been taken that can be shown
6(...continued)
that the position of the United States in the
proceeding was substantially justified.
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