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Sandra charges that “Respondent continues to commingle the two
cases and issues despite this Court’s ruling that the Petitioners
are separate in property.” Firstly, we have concluded (supra
Parts B.1, 3) that Sandra was not the prevailing party with
respect to the community property issue. Secondly, we shall not
ignore the fact that it was petitioners who chose “to commingle
the two cases”. The costs were incurred by both petitioners and
not only Sandra. Accordingly, Sandra’s broad contention falls.
We proceed to consider the other contentions that have been
raised as to this issue and conclude that, as to some of these
contentions, respondent’s arrows have hit their targets. Cf.
Estate of Fusz v. Commissioner, 46 T.C. 214, 215 (1966).
We agree with respondent’s contentions that any award of
costs must take account of the facts that the costs were incurred
(1) to represent Michael as well as Sandra, and (2) to deal with
all the issues in the case, including those where respondent’s
position was substantially justified. For the most part it is
not practical to assign a pigeonhole for every item.
In the notices of deficiency, respondent’s determinations of
civil fraud penalties against Sandra (to the extent the civil
fraud penalties exceeded the negligence penalties) totaled about
one-eighth of the aggregate determinations against both Sandra
and Michael. Because petitioners had to prepare as though
everything that affected either of them also affected the other,
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