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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
(continued...)
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