Crop Associates - Page 11




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          pertaining to the partnership item determinations have been known           
          to respondent for many years.”                                              
               2.  The Requirements of Justice                                        
               We must freely give leave to amend a pleading when justice             
          so requires.  See Rule 41(a).  Justice does not require leave to            
          amend a pleading, however, when giving such leave will surprise             
          and substantially disadvantage an adverse party.  See, e.g.,                
          Estate of Horvath v. Commissioner, 59 T.C. 551, 555 (1973).                 
               3.  Discussion                                                         
               Intervenor has failed to persuade us that justice requires             
          us to grant him leave to make the amendment.  We have set forth             
          supra in section II the elements necessary to sustain the defense           
          of equitable recoupment.  Those elements involve facts well                 
          beyond those raised by petitioner’s assignments of error in the             
          petition.  They involve facts concerning other years of the                 
          partnership and items that are not partnership items.  For                  
          instance, nothing in the petition would alert respondent that               
          payments of tax by the partners for their 1987 tax year might be            
          placed in issue.  Many of the facts necessary to rebut the                  
          amendment were established well over 10 years ago, and, even if             
          respondent was once in possession of evidence of those facts,               
          intervenor has failed to show us that such evidence is readily              
          available to respondent today.  Moreover, by the date respondent            
          had obeyed our order to respond to the motion (August 4, 1999),             
          the period for discovery had almost run.  See Rule 70(a)(2)                 





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