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income as an independent insurance agent, the effect of which, if
determined to be deductible, would reduce her self-employment
income and the resulting self-employment tax. It was at this
point that respondent orally moved for a motion for entry of
decision.
We deal first with the question of whether we should allow
petitioners to raise for the first time, on the date set for
trial, the issue regarding their entitlement to deduct certain
business expenses in computing net income subject to self-
employment tax. We must look at the pleadings to see if this
issue is, indeed, a new issue, and, if it is, consider whether
trying this new issue places respondent at an unfair
disadvantage.
Petitioners argue that the issue of petitioners’ entitlement
to business deductions is not a new issue because their petition
implicitly raises the issue since they have contested the whole
amount of the deficiency. Therefore, petitioners contend that
respondent had knowledge of the issue and has not been placed at
a disadvantage. Petitioners further assert that even if we find
that this is a new issue, they should be permitted to amend the
petition and raise the issue. Respondent strongly objects to
petitioners’ attempt to raise this issue contending that it is a
new issue raised for the first time on the day of the trial. We
believe respondent’s objection to be well taken.
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