Barbara A. Owen - Page 16

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          because she had actual knowledge when she signed the returns of             
          any items giving rise to the deficiency that were allocable to              
          her spouse.                                                                 
               The Commissioner’s position is substantially justified if it           
          has a reasonable basis in both fact and law and is justified to a           
          degree that could satisfy a reasonable person.  Huffman v.                  
          Commissioner, supra at 1147 n.8 (citing Pierce v. Underwood, 487            
          U.S. 552, 565 (1988)); Maggie Mgmt. Co. v. Commissioner, supra at           
          443; sec. 301.7430-5(c)(1), Proced. & Admin. Regs.  The                     
          reasonableness of respondent’s position turns on the available              
          facts that formed the basis for the position and any legal                  
          precedents related to the case.  Maggie Mgmt. Co. v.                        
          Commissioner, supra at 443; DeVenney v. Commissioner, 85 T.C.               
          927, 930 (1985).  A significant factor in determining whether the           
          Commissioner’s position is substantially justified as of a given            
          date is whether, on or before that date, the taxpayer has                   
          presented all relevant information under the taxpayer’s control             
          and relevant legal arguments supporting the taxpayer’s position             
          to the appropriate Service personnel.5  Maggie Mgmt. Co. v.                 




               5“[A]ppropriate Internal Revenue Service personnel” are                
          those employees who are reviewing the taxpayer’s information or             
          arguments, or employees who, in the normal course of procedure              
          and administration, would transfer the information or arguments             
          to the reviewing employees.  Sec. 301.7430-5(c)(1), Proced. &               
          Admin. Regs.                                                                




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