- 5 - Discussion The prevailing party in a Tax Court proceeding may be entitled to recover administrative and litigation costs. See sec. 7430(a); Rule 231. However, a taxpayer will not be treated as the prevailing party if the Commissioner’s position was substantially justified. Sec. 7430(c)(4)(B); see Pierce v. Underwood, 487 U.S. 552, 565 (1988). The fact that the Commissioner concedes is not determinative of the reasonableness of the Commissioner’s position. Wasie v. Commissioner, 86 T.C. 962, 969 (1986). The taxpayer bears the burden of proving he meets the requirements in section 7430 for an award of costs, except that the taxpayer will not be treated as the prevailing party if the Commissioner establishes that the position of the Commissioner was substantially justified. See Rule 232(e). The Court determines the reasonableness of respondent’s position as of the time respondent took the position. Sec. 7430(c)(7). Respondent took a position in the administrative proceeding as of the date of the notice of deficiency. Sec. 7430(c)(7)(B). In the judicial proceeding, respondent took a position when respondent filed the answer. Sec. 7430(c)(7)(A); Huffman v. Commissioner, 978 F.2d 1139, 1144-1147 (9th Cir. 1992), affg. in part, revg. in part on other grounds and remanding T.C. Memo. 1991-144. Respondent’s administrative and litigation positions are substantially justified if they have a reasonablePage: Previous 1 2 3 4 5 6 7 8 NextLast modified: November 10, 2007