- 18 - clude that respondent raised the position under section 72(e) so late as to prejudice petitioners. Consequently, we shall not allow respondent to advance that position in this case.5 For the first time in the trial memorandum, respondent contended that section 72(p)(3)6 disallows the interest deduc 4(...continued) (ii) with respect to which 85 percent or more of the total contributions during a representative period are derived from employee contributions. [Sec. 72(e)(7)(B).] 5 Assuming arguendo that we were to have allowed respondent to advance the position under sec. 72(e), that position would be a new matter requiring the presentation of different evidence which was not raised in the notice and on which respondent would have the burden of proof. See Rule 142(a); Seagate Tech., Inc., & Consol. Subs. v. Commissioner, 102 T.C. 149, 169 (1994); Achiro v. Commissioner, 77 T.C. 881, 890 (1981). On the record before us, we find that if the Court were to have permitted respondent to advance the position under sec. 72(e), respondent has failed to establish that the Hickman corporation profit-sharing plan is a plan described in sec. 72(e)(7) and that sec. 72(e) precludes the interest deductions at issue. 6 Sec. 72(p)(3) provides: (A) In General.--No deduction otherwise allowable under this chapter shall be allowed under this chapter for any interest paid or accrued on any loan described in subpara- graph (B). (B) Loans to Which Subparagraph (A) Applies.-- For purposes of subparagraph (A), a loan is described in this subparagraph-- (i) if paragraph (1) does not apply to such loan by reason of paragraph (2), and (ii) if-- (I) such loan is made to a key employee (as de- fined in section 416(i)), or (continued...)Page: Previous 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Next
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