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Accordingly, we reach the same conclusions under this heading as
we do under the litigation costs heading.
We hold, for respondent, that respondent has established
that the position of the United States in the administrative
proceeding, that Sandra was required to apply the usual Louisiana
community property laws, was substantially justified.
We hold, for Sandra, that respondent failed to establish
that the position of the United States in the administrative
proceeding, that Sandra was liable for the fraud penalty, was
substantially justified, but only to the extent that the 75-
percent civil fraud penalty would have exceeded the 20-percent
negligence penalty.
C. Protracted Proceedings
Respondent asserts that Sandra “unreasonably protracted” the
litigation of this case by filing an unfounded and unnecessary
motion. Section 7430(b)(3) provides that a prevailing party is
not entitled to recover costs for periods during which the party
has “unreasonably protracted” the administrative or court
proceedings. Sandra contends that she has not unreasonably
protracted the proceedings. Respondent argues that Sandra
unreasonably protracted the proceedings and is not entitled to
costs for a period of approximately 10 months, beginning with the
filing of petitioners’ Motion to Reopen the Record or in the
Alternative for a New Trial because, respondent asserts, the
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