- 8 -
5(c)(1), Proced. & Admin. Regs.
Petitioners contend that respondent’s position in the answer
was not substantially justified because it was “patently
incorrect or not adequately stated to be justified”. In so
arguing, petitioners rely on the following statements respondent
made in the answer: (1) Respondent denied that the three errors
in the notice existed, and (2) respondent denied that certain
adjustments to petitioners’ income tax, which respondent
eventually conceded, were incorrect. In addition, petitioners
assert that Mr. Potter’s letter of August 9, 2002, had addressed
some of the adjustments that respondent later conceded.
According to petitioners, respondent’s position in the answer was
not substantially justified because respondent had been
“presented with undisputed contrary facts” beforehand.
Although respondent ultimately conceded certain adjustments
to petitioners’ income taxes for 1999, 2000, and 2001, our focus
is on the information that respondent possessed at the time of
filing the answer. Rosario v. Commissioner, supra. The only
information petitioners had provided before respondent filed the
answer was the information contained in Mr. Potter’s letter. In
the letter, Mr. Potter set forth petitioners’ disagreements with
respondent’s proposed adjustment but included no supporting
documents or other proof of his assertions. Respondent was not
required to concede the case on the basis of Mr. Potter’s letter
Page: Previous 1 2 3 4 5 6 7 8 9 10 Next
Last modified: May 25, 2011