Kristin J. Calitri - Page 8

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          Anthony v. United States, 987 F.2d 670, 674 (10th Cir. 1993).               
          The Commissioner’s position may be incorrect but nevertheless be            
          substantially justified “if a reasonable person could think it              
          correct”; that is, if the position has a “reasonable basis both             
          in law and fact”.  Pierce v. Underwood, supra at 566 n.2; Huffman           
          v. Commissioner, 978 F.2d 1139, 1147 n.8 (9th Cir. 1992), affg.             
          in part, revg. in part and remanding T.C. Memo. 1991-144; sec.              
          301.7430-5(c)(1), Proced. & Admin. Regs.  A position has a                  
          reasonable basis in fact if there is such relevant evidence as a            
          reasonable mind might accept as adequate to support a conclusion.           
          Pierce v. Underwood, supra at 564-565; Huffman v. Commissioner,             
          supra.                                                                      
               The relevant inquiry is “whether * * * [the Commissioner]              
          knew or should have known that [her] position was invalid at the            
          onset”.  Nalle v. Commissioner, 55 F.3d 189, 191 (5th Cir. 1995),           
          affg. T.C. Memo. 1994-182.  The Court looks to whether the                  
          Commissioner’s position was reasonable given the available facts            
          and circumstances at the time that the Commissioner took his                
          position.  See Maggie Mgmt. Co. v. Commissioner, 108 T.C. 430,              
          442-443 (1997); DeVenney v. Commissioner, 85 T.C. 927, 930                  
          (1985).                                                                     
               The fact that the Commissioner eventually loses or concedes            
          a case does not by itself establish that the position taken is              






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