Alejandrina De Aycardi - Page 6

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               Respondent now argues that the dividend income petitioner              
          received on her mutual fund investment does not qualify as                  
          nontaxable interest under section 871(h), and -- because it has             
          now been determined that petitioner was not a U.S. resident --              
          respondent argues that the dividend income of $8,414 and $106,682           
          that petitioner received should be treated as taxable U.S. source           
          income to petitioner and subject to tax at the 30-percent                   
          withholding rate applicable to taxable U.S. source income of                
          nonresident aliens.                                                         
               Also, because respondent does not want to assert an                    
          increased deficiency and therefore shift the burden of proof                
          under Rule 142(a), respondent -- on the dividend income --                  
          asserts only the original tax deficiencies that were determined             
          to be applicable thereto based on the tax rates applicable to               
          U.S. residents (namely, the 20-percent backup withholding rate).            
               Respondent's taxation of petitioner on the dividend income             
          as a nonresident alien but at the 20-percent U.S. backup                    
          withholding rate (so as to avoid increasing the tax deficiency              
          attributable to the dividend income) does not constitute a new              
          issue.  The assertion of a new theory which merely clarifies or             
          develops the original determination without being inconsistent              
          and without increasing the amount of the deficiency generally               
          will not be treated as a new issue.  Achiro v. Commissioner,                
          supra at 890.                                                               

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