- 6 -
471 (1993), affd. in part, revd. in part and remanded on another
issue 43 F.3d 172 (5th Cir. 1995).
The Court looks to whether the Commissioner’s position was
reasonable given the available facts and circumstances at the
time the Commissioner took his position. See Maggie Mgmt. Co. v.
Commissioner, 108 T.C. 430, 442-443 (1997); DeVenney v.
Commissioner, supra at 930. The Commissioner’s position in a
judicial proceeding is generally the position the Commissioner
took in the answer to the petition. Sec. 7430(c)(7)(A); Huffman
v. Commissioner, supra at 1144-1147; Maggie Mgmt. Co. v.
Commissioner, supra at 443; Grant v. Commissioner, 103 F.3d 948,
952 (1996), affg. T.C. Memo. 1995-374; Sher v. Commissioner,
supra at 86.
Whether Respondent’s Position Was Substantially Justified
In Allemeier I, respondent’s position was that petitioner
was not entitled to an MBA-related expense deduction on two
bases. Respondent argued, first, that petitioner’s enrollment in
the MBA program constituted a “minimum educational requirement”
to continue his employment at the company. See sec. 1.162-
5(b)(2), Income Tax Regs. Respondent argued, second, that
petitioner’s MBA qualified him for a new trade or business. See
sec. 1.162-5(b)(3), Income Tax Regs.
Although we found that petitioner was encouraged rather than
required to obtain the MBA, we find that respondent was
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