Estate of Daphne Baynham White, Deceased, Kemble White, Independent Executor - Page 15

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                 According to the estate, Estate of Cervin v.                         
             Commissioner, 111 F.3d 1252 (5th Cir. 1997), revg. T.C.                  
             Memo. 1994-550, on remand T.C. Memo. 1998-176, affd. 200                 
             F.3d 351 (5th Cir. 2000), “holds that the Government’s                   
             litigating position includes pre-litigation proceedings”.                
             Our reading of Estate of Cervin v. Commissioner, supra,                  
             does not reveal any such holding.  In any event, even if                 
             Estate of Cervin v. Commissioner, supra, could be so read,               
             we believe that under the decisions of the court to which                
             an appeal of this case would be taken, the United States                 
             Court of Appeals for the Ninth Circuit, as under our own                 
             decisions, section 7430 requires a bifurcated approach in                
             determining whether the position of the United States in a               
             judicial proceeding is substantially justified for purposes              
             of section 7430(c)(4)(B).  See, e.g., Kenney v. United                   
             States, supra; Huffman v. Commissioner, supra; Maggie Mgmt.              
             Co. v. Commissioner, supra; Swanson v. Commissioner, supra.              
                 Furthermore, we cannot distinguish the cases utilizing               
             the bifurcated approach on the ground that “In each of                   
             those cases the judicial proceedings were preceded by                    
             administrative proceedings in which the taxpayers failed to              
             come forward with the evidence needed to resolve the                     
             contested issues.”  The bifurcated approach was formulated               
             because of the language of the statute, particularly, the                






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