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place the notice of deficiency alternative determination of the
20-percent negligence penalty. That is an issue that would be
decided by a preponderance of the evidence, and the burden would
have been on Sandra to prove that the negligence penalty did not
apply.9 The position of respondent, that Sandra would have been
liable for the negligence penalty if respondent had not succeeded
in establishing her liability for the civil fraud penalty, was
substantially justified.
Accordingly, we hold for Sandra on this issue, but only to
the extent that the 75-percent civil fraud penalty would have
exceeded the 20-percent negligence penalty.
3. Administrative Costs
For purposes of the administrative proceedings in this case,
the position of the United States is the position taken by
respondent in the notice of deficiency. Sec. 7430(c)(7)(B);
Maggie Management Co. v. Commissioner, 108 T.C. at 442.
Neither side has stated that any element of the
administrative costs dispute as to substantial justification is
different from the elements discussed supra regarding litigation
costs. See Maggie Management Co. v. Commissioner, 108 T.C. at
442-443; Swanson v. Commissioner, 106 T.C. at 86-87.
9 As noted supra, sec. 7491 does not affect the instant
case. But, even if sec. 7491(c) had applied, the burden of
persuasion would have remained on Sandra. Higbee v.
Commissioner, 116 T.C. 438, 446-449 (2001).
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