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petitioner will have ample opportunity to prepare to try the new
issue.
Discussion
Section 6214(a) provides that this Court shall have
jurisdiction to redetermine the correct amount of the deficiency
even if the amount so redetermined is greater than the amount
determined by the Commissioner in the notice of deficiency mailed
to the taxpayer if the Commissioner asserts a claim therefor at
or before the hearing or a rehearing. Consistent with the
general mandate of section 6214(a), this Court generally will
only exercise its jurisdiction over an increased deficiency where
the matter is properly pleaded. See Markwardt v. Commissioner,
64 T.C. 989, 997 (1975), and cases cited therein.
Rule 41(a) states in relevant part that a pleading to which
no responsive pleading is permitted may be amended at any time
within 30 days after it is served if the case has not yet been
placed on a trial calendar. Otherwise, the pleading may be
amended only by leave of Court or by written consent of the
adverse party, and leave shall be given freely when justice so
requires. The Commissioner bears the burden of proof in respect
of any increases in deficiency. Rule 142(a).
Respondent did not make a determination that the SRLY
provisions would reduce or eliminate the amount of petitioner's
general business credits during the examination period, nor was
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