- 20 -
We conclude that, in the interest of justice, petitioner
should be relieved from the effects of the stipulated 1994
computations for the narrow purpose of redetermining interest for
the 1978 and 1977 tax years during the interim period at issue.
Cf. Rule 91(e); Louisiana Land and Exploration Co. v.
Commissioner, 90 T.C. 630, 648 (1988); Korangy v. Commissioner,
893 F.2d 69, 72 (4th Cir. 1990), affg. T.C. Memo. 1989-2
(applying Rule 91(e) to a settlement agreement).
In this context, we find it irrelevant whether the error as
to the carryback of the 1979 ITC was due to the carelessness of
either party, in this case, the failure of petitioner to protect
its interest by pointing out to respondent at the time the 1994
computations were constructed that the amounts of the 1979 ITC
had been omitted. As we stated in Woods v. Commissioner, 92 T.C.
776, 789 (1989):
The circumstances of this case do not warrant
withholding relief from a mistake. The mere fact that
the party seeking relief did not exercise reasonable
care does not preclude reformation. 1 Restatement,
Contracts 2d, sec. 155, comment a; sec. 157, p. 416.
Reformation provides a result that both parties
agreed to and prevents an unintended and unexpected
windfall. * * *
We now turn to the proper computation of interest, for
purposes of determining whether or not petitioner has actually
Page: Previous 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 NextLast modified: May 25, 2011