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claimed NOL deductions unrelated to petitioners' investment in
Arbitrage Management constitute an impermissible new issue.
Petitioners note that certain alternative computations that
respondent made and exchanged with petitioners (of a proposed
settlement of the Arbitrage Management adjustments) reflected
that the NOL's that petitioners now claim might be available as
carryback loss deductions in computing petitioners’ taxable
income for 1979 and 1980. Petitioners argue therefrom that
respondent was on notice of the claimed NOL's and that
petitioners’ claim, at this time, to such carryback loss
deductions for 1979 and 1980 should not be treated as raising a
new issue. To the contrary, the record indicates that the 1981
and 1982 claimed NOL's were reflected in respondent’s proposed
alternative settlement computations on the basis and on the
condition that petitioners’ 1981 and 1982 tax years were open for
statute of limitation purposes for the filing of claims for
refund and for audit by respondent. When it was established that
petitioners had not timely filed claims for refund for 1981 and
1982 and that those years were closed for both the filing of
claims for refund and audit purposes, petitioners’ entitlement to
such claimed NOL's disappeared, and the claimed losses were
properly eliminated from respondent’s proposed computations.
The mere fact that respondent, in a case, may be aware
generally of claimed NOL's arising in later years not before the
Court does not put respondent, or the Court, on notice that such
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Last modified: May 25, 2011