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matter of right but is within the discretion of the Court.
Zenith Radio Corp. v. Hazeltine Research, 401 U.S. 321, 330-333
(1971); Foman v. Davis, 371 U.S. 178, 182 (1962); Kramer v.
Commissioner, 89 T.C. at 1085; Law v. Commissioner, 84 T.C. 985,
990 (1985). The trial court’s ruling on this matter will not be
reversed unless the trial court abuses its discretion. Wood v.
Santa Barbara Chamber of Commerce, Inc., 705 F.2d 1515, 1520 (9th
Cir. 1983); Law v. Commissioner, 84 T.C. at 990.
Denials of motions for leave to amend are generally based on
undue delay, and the possibility of bad faith. Wood v. Santa
Barbara Chamber of Commerce, Inc., 705 F.2d at 1520; Kramer v.
Commissioner, 89 T.C. at 1085; see Charpentier v. Godsil, 937
F.2d 859, 863-864 (3d Cir. 1991). In determining the justice of
a proposed amendment, we must examine the particular
circumstances in the case before us, for the exercise of
discretion “`may never be arbitrary and must be controlled by
sound reason and fairness.’” Law v. Commissioner, 84 T.C. at 990
quoting California Brewing Association v. Commissioner, 43 B.T.A.
721, 725 (1941).
Petitioners’ counsel should have seen paragraph 7 in the
answer. Although paragraph 8 is twice as long as paragraph 7,
paragraph 7 covers all the income adjustments and applies to both
petitioners, while paragraph 8 covers collateral estoppel as to
only Anthony and only as to one issue. If paragraph 7 is
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