Estate of Mary D. Maggos - Page 16

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          petitioner’s counsel were aware that the pleadings and the                  
          pretrial memorandum in this case and the District Court                     
          litigation were totally inconsistent with petitioner’s present              
          argument that decedent had no ownership interest in the PCAB                
          shares.  We also have no doubt that had petitioner amended the              
          pleadings in this case in order to take such a position, it would           
          have been prejudicial and possibly fatal to petitioner’s District           
          Court litigation.                                                           
               We agree with respondent that petitioner first asserts the             
          ownership argument on brief.10  While this Court is seldom                  
          inclined to consider an argument raised for the first time on               
          brief, there is no absolute rule barring such consideration.  As            
          we said in Ware v. Commissioner, 92 T.C. 1267, 1268 (1989), affd.           
          906 F.2d 62 (2d Cir. 1990):                                                 
                    The rule that a party may not raise a new issue on                
               brief is not absolute.  Rather, it is founded upon the                 
               exercise of judicial discretion in determining whether                 
               considerations of surprise and prejudice require that a                
               party be protected from having to face a belated                       
               confrontation which precludes or limits that party’s                   
               opportunity to present pertinent evidence. * * *                       
               [Citations omitted.]                                                   
          Every representation by petitioner, until the opening brief was             
          filed, had been that decedent was the owner or beneficial owner             
          of the redeemed shares.  The Court’s pretrial order of July 15,             

               10We do not agree that petitioner’s “incomplete gift                   
          argument”, which is based on alternative grounds of fraud, theft,           
          and mistake, is a new argument raised for the first time on                 

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