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understatement additions for 1986 and 1987, the years of the
largest deficiencies.
Despite their stipulations, petitioners now claim in their
computation for entry of decision under Rule 155 they are not
liable for the taxes and additions determined by the Court for
1986 and 1987, because the notice of deficiency was issued more
than 3 years after they filed their income tax returns. They
claim they do not fall within section 6501(e)(1)(A)(i) which
provides a 6-year statute of limitations if the taxpayer omits
from gross income more than 25 percent. Although they raised
this affirmative defense in their petition (which respondent
denied in the answer), they did not mention it as an issue in
their opening statement at trial, on opening brief or reply
brief, or in their motion for reconsideration of our opinion.
Respondent, and the Court, had every reason to believe this
argument had been waived.
More importantly, par. 64 of the stipulation states: "The
petitioners agree that they are liable for deficiencies in tax in
the amounts of $3,250.00, $38,268.00, $17,071.00, and $7,345.00
for tax years 1985, 1986, 1987, and 1988, respectively."
(Emphasis added.)
Rule 91(e) provides that a stipulation shall be treated, to
the extent of its terms, as a conclusive admission by the parties
to the stipulation, unless otherwise permitted by the Court, or
agreed upon by those parties. The Court will not permit a party
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Last modified: May 25, 2011