- 7 -
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
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Next
Last modified: May 25, 2011