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OPINION
HALPERN, Judge:
I. Introduction
This case involves a petition for the readjustment of
certain partnership items reported on the 1986 tax return of Crop
Associates-1986, a limited partnership with its principal place
of business in Coachella, California (the partnership). The
petition was filed by a partner other than the tax matters
partner. Frederick H. Behrens is the tax matters partner, and,
on June 28, 1999, we allowed Mr. Behrens to intervene in the
case. On July 14, 1999, Mr. Behrens (intervenor) moved for leave
to file amendment to petition (the motion and the amendment,
respectively). The amendment would add to the petition the
affirmative defense of equitable recoupment. In support of that
defense, the intervenor avers:
a. In 1986, the Partnership deducted a farming
expense [which deduction respondent has disallowed].
b. In 1987, the Partnership reported as income an
amount equal to the farming expense taken in 1986.
c. The [1986 farming expense] * * * and
offsetting adjustment for 1987 arise out of a single
transaction, i.e., a farming contract.
d. This single transaction is subject to two
taxes based on inconsistent legal theories.
e. Respondent’s position is that taxes paid for
1987 are statutorily barred from refund.
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