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of the reasonableness of the Commissioner’s position is
based upon the available facts that formed the basis for
the position, as well as any controlling legal precedent.
See Maggie Mgmt. Co. v. Commissioner, 108 T.C. 430, 442
(1997); Coastal Petroleum Refiners, Inc. v. Commissioner,
94 T.C. 685, 688 (1990).
The phrase “position of the United States” is defined
by section 7430(c)(7), as the position taken by the United
States in a judicial proceeding, see sec. 7430(c)(7)(A),
and the position taken in an administrative proceeding as
of the earlier of (1) the date on which the taxpayer
receives the notice of the decision of the Internal Revenue
Service Office of Appeals, or (2) the date of the notice of
deficiency, see sec. 7430(c)(7)(B). Based upon the plain
language of this definition, we held in Huffman v.
Commissioner, T.C. Memo. 1991-144, that the position of the
United States in the administrative proceedings was
unjustified, whereas the position of the United States in
the judicial proceeding was “not substantially
unjustified”. In effect, we held that the United States
can take two positions in a particular case, one position
in the prelitigation administrative proceedings and another
position in the judicial proceedings, and each position
must be evaluated separately to determine whether it was
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