Bobby E. Welch - Page 15

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               Rather, petitioner argues that respondent should be                    
          precluded by the stipulation from raising the issue.  In                    
          paragraph 6 the parties stipulated that for 1986 the total                  
          deposits were $1,105,003.  In paragraph 9 the parties stipulated            
          that the "unexplained deposits which remain at issue" for 1986              
          were $352,281.  The problem with petitioner's position is that we           
          are not concerned here with unexplained deposits.  To the                   
          contrary, the amount in question admittedly was not deposited,              
          and respondent is not attempting to change the amount of deposits           
          which were the subject of the stipulation.12  Nor do we find                
          convincing petitioner's argument that he was surprised.  It was             
          petitioner who brought the subject up during his testimony.                 
               We recognize that any time there is an amendment to a                  
          pleading that either increases or decreases a deficiency, there             
          is a pecuniary prejudice to the other party.  But that is not the           
          prejudice we are concerned with here.  Rather we are concerned              
          with whether petitioner was unfairly prejudiced in presenting his           
          case, and we do not find that type of prejudice.  Thus, we will             
          allow respondent to amend the answer in docket No. 23725-95 to              
          increase the deficiency for 1986 by the tax on $5,713.                      
               We next turn to the question whether petitioner had                    
          unreported income during 1986 in the amount of $5,713.  Since               


               12  Petitioner appears to argue that the parties stipulated            
          the amount of the deficiency for 1986.  If, indeed, that were the           
          case, we are unsure of the reason for a 2-day trial.                        




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