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Respondent contends that Activewear's transfers to Jackson
were personal because Activewear was not in the lending business.
We disagree. Respondent cites no authority for this contention.
We conclude that the amounts that Jackson owed to Activewear
in 1990 and 1991 were not constructive dividends to petitioner.
D. Whether Petitioner Received Income From Security Interests
Provided by Jackson
Jackson assigned four security interests to petitioner and
petitioner used the four security interests to secure an $80,000
personal loan. Respondent contends in respondent's pretrial
memorandum, opening statement, and posttrial brief that
petitioner received $402,600 in income from the four security
interests. We disagree.
Respondent did not raise the theory that petitioner received
income from the security interests in the notice of deficiency.
A theory not raised in the notice of deficiency is new matter if
it increases the original deficiency or requires the taxpayer to
present different evidence. Rule 142(a); Vetco, Inc. v.
Commissioner, 95 T.C. 579, 588 (1990); Achiro v. Commissioner, 77
T.C. 881, 890 (1981); Estate of Falese v. Commissioner, 58 T.C.
895, 898-899 (1972). To contest this theory, petitioner would
have needed to introduce evidence relating to his consolidated
loan from Trust Co. and the four security interests. The four
security interests were not collateral for Activewear's loans to
Jackson. Petitioner was not required to offer that evidence to
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