Crop Associates - Page 3

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               Rule 41 addresses amended and supplemental pleadings.1                 
          Under the circumstances here existing, Rule 41(a) provides that a           
          party can amend his pleading only by (1) written consent of the             
          adverse party or (2) leave of Court, and such leave shall be                
          given freely when justice so requires.  Respondent has not                  
          consented to the amendment and objects to the motion.  Respondent           
          objects to the motion on the grounds that (1) the Court generally           
          lacks jurisdiction to consider the defense of equitable                     
          recoupment,  (2) this is a partnership proceeding and, since                
          equitable recoupment is not a partnership item, it is not an                
          appropriate item for the Court to consider, and (3) granting the            
          motion will cause a substantial disadvantage to respondent.                 
               We assume, arguendo, that respondent's first objection lacks           
          merit.  See Estate of Branson v. Commissioner, 113 T.C. ___                 
          (1999); Estate of Mueller v. Commissioner, 101 T.C. 551 (1993),             
          affd. on other grounds 153 F.3d 302 (6th Cir. 1998).  We agree,             
          however, with his last two objections.  Our reasons for agreeing            
          with his last two objections are as follows.                                
          II. Equitable Recoupment                                                    
               To "recoup" is to get back the equivalent of something lost.           
          The American Heritage Dictionary 1511 (3d ed. 1992).  The                   

          1    Hereafter, unless otherwise indicated, all section                     
          references are to the Internal Revenue Code in effect for the               
          year in issue, and all Rule references are to the Tax Court Rules           
          of Practice and Procedure.                                                  

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