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computation, respondent, for the first time, alleges that the
notice of deficiency was in error, and that $120,172 of the
credit allowed should have been reflected on a different line in
the notice of deficiency as "Additional credit for state death
taxes allowable, if substantiated." Had this been done, the
amount of the deficiency determined by respondent would have been
increased by $120,172.11
Respondent now wants to amend the answer to correct the
error and increase the deficiency. Apparently, assuming that
this will be permitted, respondent has included this adjustment
in the Rule 155 computation. The problem with respondent's
position is that Rule 155(c) precludes a party from raising a new
issue in a proceeding under Rule 155. The credit for State death
taxes was previously uncontested and has nothing to do with the
other computational issues. We, therefore, deny respondent's
motion for leave to amend answer. The Rule 155 computation
should not include any change to the credit for State death taxes
as determined in the notice of deficiency.
Appropriate orders will
be issued.
11Respondent recognizes that the actual impact of
respondent's error will probably be far less than this since, as
a result of our prior opinion, petitioner's taxable estate will
be increased. To the extent petitioner is obligated to pay
additional State death taxes, it would be entitled to a
substantial amount of the credit already allowed. See sec. 2011.
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Last modified: May 25, 2011