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documentation through Moffatt until the first motion in limine,
about 4-1/2 months after the answer was filed.
We conclude respondent’s position was substantially
justified at the time the answer was filed, and respondent timely
conceded the case after receiving the documentation attached to
petitioner’s motion in limine. As a result, we conclude
respondent’s position in the litigation was substantially
justified within the meaning of section 7430(c)(4)(B)(i).
We consider first what was the “position of the United
States” that respondent has the burden of proving was
“substantially justified”. Then we consider what respondent knew
when respondent took that position. Then we consider whether
that position was substantially justified.
2. Respondent’s Position
In light of the foregoing, the position of the United States
in the instant case is the position respondent took in the
answer, filed on November 20, 2003.17
In the notice of deficiency, respondent’s explanation for
the earned income credit disallowance is “Since you did not
17 Petitioner contends that the position of the United
States in the instant case is the position taken in the notice of
deficiency. In the instant case, as shown infra, the answer in
effect embraced the notice of deficiency. It is not clear to us
why petitioner appears to reject the Maggie Management approach.
On the record in the instant case, neither our analysis nor our
conclusion would be different if we were to adopt petitioner’s
approach. See Maggie Management Co. v. Commissioner, 108 T.C.
430, 442-443 (1997).
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