- 19 - tions at issue. Petitioners did not claim at trial that they were surprised by respondent's position under section 72(p)(3). To the contrary, petitioners' counsel, Mr. Rice, made reference to respondent's argument under section 72(p)(3) in his closing statement after trial. Although petitioners were not surprised at trial by respondent's position under section 72(p)(3), that position nonetheless constitutes a new matter requiring the presentation of different evidence which was not raised in the notice and on which respondent has 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. at 890. The Tax Reform Act of 1986 (1986 Act), Pub. L. 99-514, sec. 1134(c), 100 Stat. 2484, amended the Code to add a new section 72(p)(3), effective for loans made, renewed, renegotiated, modified, or extended after December 31, 1986, 1986 Act, sec. 1134(e), 100 Stat. 2484 (1986 Act effective date provisions). Respondent contends that the 1982 plan loan was modified in 1991 by the 1991 settlement and that, consequently, the 1982 plan loan falls within the 1986 effective date of section 72(p)(3). In support of that contention, respondent asserts: When the plan was examined in 1991, the settlement agreement called for the terms of the original [1982] 6(...continued) (II) such loan is secured by amounts attributable to elective 401(k) or 403(b) deferrals (as defined in section 402(g)(3)).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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