Gabriel Gutierrez and Connie Gutierrez - Page 5

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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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