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B. Whether Respondent’s Position Was Substantially Justified
1. Date of Respondent’s Position for Purposes of Applying
the Substantially Justified Standard
For purposes of applying the substantially justified
standard, the position of the United States is the Commissioner’s
position 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. Sec. 7430(c)(7)(B)(ii);
Fla. Country Clubs, Inc. v. Commissioner, 122 T.C. 73, 77 (2004).
Thus, respondent’s position is the position stated in the Notice
of Decision dated January 13, 2000, in which respondent denied
petitioners’ request to abate the late payment addition for 1993,
1995, and 1996.
2. When Is the Commissioner’s Position Substantially
Justified
The Commissioner's position is substantially justified if,
based on all of the facts and circumstances, the Commissioner’s
position has a reasonable basis in both law and fact. Pierce v.
Underwood, 487 U.S. 552, 565 (1988) (construing similar language
in the Equal Access to Justice Act, 5 U.S.C. sec. 504 (2000));
Powers v. Commissioner, 100 T.C. 457, 470, 473 (1993), affd. on
this issue, revd. in part and remanded on other issues 43 F.3d
172 (5th Cir. 1995). For a position to be substantially
justified, there must be substantial evidence to support it.
Pierce v. Underwood, supra at 564-565; Powers v. Commissioner,
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Last modified: May 25, 2011