- 25 -
(5) Clear and concise lettered statements of the
facts on which petitioner bases the assignments of
error, except with respect to those assignments of
error as to which the burden of proof is on the
Commissioner. [Rule 34(b).]
Without notice of the Commissioner's basis for a determination of
deficiency, it would be difficult, if not impossible, to comply
with Rule 34(b).
We have previously held that new matter is raised when the
basis or theory on which the Commissioner relies was not stated
or described in the notice of deficiency and the new theory or
basis requires the presentation of different evidence. Wayne
Bolt & Nut Co. v. Commissioner, 93 T.C. at 507. This rule for
determining whether a new matter has been raised by the
Commissioner is consistent with, and supported by, the statutory
requirement that the notice of deficiency "describe the basis"
for the Commissioner's determination. This rule also provides a
reasonable method for enforcing the requirements of section
7522.21
In the instant case, the notice of deficiency does not
describe section 66(b) as respondent's basis for disallowing the
21On brief, respondent declined to address what the
consequences, if any, would be if we were to find that respondent
was attempting to rely on a basis that he failed to describe in
the notice of deficiency as required by sec. 7522. However, in
Straight v. Commissioner, T.C. Memo. 1997-569, respondent
conceded that placing the burden of proof on respondent may be
proper where the notice of deficiency violates sec. 7522.
Page: Previous 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 NextLast modified: May 25, 2011