- 32 -
In Wayne Bolt & Nut Co. v. Commissioner, 93 T.C. 500, 507
(1989), we distinguished a new theory offered in support of a
proposed deficiency from a new matter requiring a shift in the
burden of proof as follows:
A new theory that is presented to sustain a
deficiency is treated as a new matter when it either
alters the original deficiency or requires the
presentation of different evidence. Colonnade
Condominium, Inc. v. Commissioner, 91 T.C. 793, 795 n.
3 (1988); Achiro v. Commissioner, 77 T.C. 881, 890-891
(1981). A new theory which merely clarifies or
develops the original determination is not a new matter
in respect of which respondent bears the burden of
proof. Achiro v. Commissioner, supra at 890; Estate of
Jayne v. Commissioner, 61 T.C. 744, 748-749 (1974);
McSpadden v. Commissioner, 50 T.C. 478, 492-493 (1968).
See also Shea v. Commissioner, supra at 191. Citing this
language, respondent contends that his section 263A argument is
covered by the notices of deficiency and is merely a new theory,
not a new matter.12 Respondent also contends that (1) even if
his section 263A argument raises a new matter, the argument does
not require the presentation of evidence different from that
required for the issues raised in the notices, but that (2) even
if his section 263A argument requires the presentation of
12In each of the notices of deficiency, respondent asserted
that petitioners had failed to establish that they had incurred
or sustained the NOL in question and disallowed the NOL
carryforward in its entirety. Respondent claims that “This
position is consistent with the argument that petitioners’ 1990
and 1991 expenses, being subject to capitalization under section
263A, do not produce a deductible loss that may be carried
forward. The section 263A argument merely clarifies the reason
the net operating loss had not been established.”
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