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“substantially justified”. This is the so-called
bifurcated approach used in determining whether the
position of the United States is substantially justified
for purposes of section 7430(c)(4)(B). See, e.g., Kenney
v. United States, 458 F.3d 1025, 1033 (9th Cir. 2006);
Huffman v. Commissioner, 978 F.2d at 1144-1148; Maggie
Mgmt. Co. v. Commissioner, supra; Swanson v. Commissioner,
supra.
The estate’s motion seeks only litigation costs.
Therefore, we need examine only respondent’s position in
this judicial proceeding. See sec. 7430(c)(7)(A). In most
cases, the position of the United States in a deficiency
proceeding in this Court is the position set forth in the
Commissioner’s answer to the petition. See, e.g., Huffman
v. Commissioner, supra; Sher v. Commissioner, 861 F.2d 131,
134-135 (5th Cir. 1988), affg. 89 T.C. 79 (1987); Maggie
Mgmt. Co. v. Commissioner, supra; Goertler v. Commissioner,
T.C. Memo. 2003-136; Rosario v. Commissioner, supra.
In this case, respondent never filed an answer. The
position of the United States was established in
respondent’s second motion to extend time within which to
answer. In that motion, respondent made a full concession
of the tax deficiency and additions to tax determined in
the notice of deficiency. As mentioned above, the second
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