Abraham and Dina Weiss - Page 18




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          deductions and credits at issue and their right to claim them.              
          See Rule 142(a).4  They have not done so here.                              
          Asserted Loss of Records                                                    
               In their reply brief, petitioners assert, for the first time           
          in these proceedings, that after they had provided respondent               
          with their only records of the Oshtemo-Kalamazoo activity,                  
          respondent never returned them.  They argue that their failure to           
          substantiate their right to the deductions and credits at issue             
          can be traced to the claimed loss of these records by respondent.           
          Citing Andrew Crispo Gallery, Inc. v. Commissioner, 16 F.3d 1336            
          (2d Cir. 1994), affg. in part, vacating and remanding in part               
          T.C. Memo. 1992-106, petitioners contend that, because respondent           
          lost their records, they are entitled to a presumption that their           
          records would support their contention that they had an adequate            
          profit motive for engaging in the Oshtemo-Kalamazoo activity.5              

               4 We note that recent modifications to the burden of proof             
          requirements in court proceedings are inapplicable here, as the             
          examination in this case commenced before July 22, 1998.  See               
          sec. 7491, as added by the Internal Revenue Service Restructuring           
          and Reform Act of 1998 (RRA), Pub. L. 105-206, sec. 3001(a), 112            
          Stat. 685, 726-727; see also RRA sec. 3001(c), 112 Stat. 727.               

               5 Our practice is not to consider new issues raised for the            
          first time on reply brief.  See Rules 31(a), 41(a); Krause v.               
          Commissioner, 99 T.C. 132, 177 (1992), affd. sub nom. Hildebrand            
          v. Commissioner, 28 F.3d 1024 (10th Cir. 1994); DiLeo v.                    
          Commissioner, 96 T.C. 858, 891 (1991), affd. 959 F.2d 16 (2d Cir.           
          1992).  In view of petitioners' pro se status and the nature of             
          the issue, however, we have exercised our discretion to permit              
          further briefing with respect to petitioners' assertion that                
          respondent has lost their records.  In this regard, we have                 
          decided to file and consider petitioner Abraham Weiss’ letter               
          that addresses arguments made in respondent's "Brief in Response            
                                                             (continued...)           

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