- 38 -
could think it correct’”. Maggie Mgmt. Co. v. Commissioner, 108
T.C. 430, 443 (1997) (quoting Pierce v. Underwood, supra at 566
n.2).
The relevant inquiry is “whether * * * [the Commissioner]
knew or should have known that * * * [his] position was invalid
at the onset”. Nalle v. Commissioner, 55 F.3d 189, 191 (5th Cir.
1995), affg. T.C. Memo. 1994-182. We look to whether the
Commissioner’s position was reasonable given the available facts
and circumstances at the time that the Commissioner took his
position. Maggie Mgmt. Co. v. Commissioner, supra at 443;
DeVenney v. Commissioner, 85 T.C. 927, 930 (1985). In deciding
whether the Commissioner’s position was substantially justified,
a significant factor is whether, on or before the date the
Commissioner assumed the position, the taxpayer provided “all
relevant information under the taxpayer’s control and relevant
legal arguments supporting the taxpayer’s position to the
appropriate Internal Revenue Service personnel.”15 Sec.
301.7430-5(c)(1), Proced. & Admin. Regs.
The fact that the Commissioner eventually concedes or loses
a case does not establish that his position was unreasonable.
15 “Appropriate 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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