R. Edwin Brown and Winsome S. Brown - Page 7

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               Since petitioners had not filed a petition with the Court,             
          section 6212(c) did not preclude respondent from issuing a second           
          statutory notice of deficiency for tax year 1990.  Accordingly,             
          we hold that the second statutory notice of deficiency is valid.            
          Motion To Conform Pleadings to the Evidence                                 
               Respondent’s motion is for leave to file an amended answer             
          for an increased deficiency and penalty.  The increase from                 
          $1,017,248 to $1,540,280 arises due to correction of the amount             
          realized from the transfer of the computer lease obligation.                
          Petitioners allege harm and prejudice should we allow respondent            
          to amend her answer.                                                        
               At the close of trial, respondent moved pursuant to Rule               
          41(b) to increase the deficiency.  This Court has held on                   
          numerous occasions that it will not consider issues which have              
          not been properly pleaded or otherwise preserved.  Markwardt v.             
          Commissioner, 64 T.C. 989, 997-998 (1975).  Nevertheless, Rule              
          41(b) provides a procedure whereby in appropriate circumstances             
          the pleadings may be amended to conform to the evidence presented           
          at trial.3                                                                  

          3  Rule 41(b) provides as follows:                                          
               (1) Issues Tried by Consent:  When issues not raised by                
               the pleadings are tried by express or implied consent of the           
               parties, they shall be treated in all respects as if they              
               had been raised in the pleadings.  The Court, upon motion of           
               any party at any time, may allow such amendment of the                 
               pleadings as may be necessary to cause them to conform to              
               the evidence and to raise these issues, but failure to amend           

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