George A. and Marysue Coward - Page 7

            law, or to mixed matters of law and fact."  Brotman v.                                       
            Commissioner, 105 T.C. 141, 148 (1995).                                                      
                  Respondent argues that petitioners improperly raised the                               
            collateral estoppel defense for the first time in their brief.                               
                  In their petition petitioners asserted the following:                                  
                  The facts upon which the Petitioner relies as the basis of                             
                  this case are as follows:                                                              
                        (a)  The Petitioner is a Partner in a Partnership that                           
                  is either involved in or is closely related to, seventeen                              
                  Partnerships whose business activities for 1977, 1978, and                             
                  1979 are now before this court in a consolidated case                                  
                  entitled Bales v. Commissioner, Docket# 12479-82, * * *                                
                        (b)  The stipulation of the parties, trial testimony,                            
                  and briefs filed by the parties in the Bales case will                                 
                  provide this court with certain background facts about the                             
                  petitioners' partnership business operations, ownership,                               
                  cattle management agreements, and legal status that are not                            
                  stated herein.                                                                         
                  Petitioners' reference to Bales v. Commissioner, T.C. Memo.                            
            1989-568, is clear, and we are aware that Bales was not yet                                  
            decided at the time they filed their petition.  However, we do                               
            not believe that the allegations contained in the petition                                   
            constituted an affirmative pleading that any factual or legal                                
            issues decided in Bales were identical to those involved in this                             
            case for purposes of raising a defense of collateral estoppel.                               
            Thus, petitioners have not properly pleaded this defense, and                                
            therefore it is waived.  Gustafson v. Commissioner, 97 T.C. 85,                              
            90 (1991).                                                                                   
                  Assuming petitioners had properly raised the doctrine of                               
            collateral estoppel, petitioners bear the burden of proving this                             
            affirmative defense.  Rules 39, 142(a); Calcutt v. Commissioner,                             

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