- 38 -
Commissioner, 41 F.3d 667 (11th Cir. 1994). Indeed, this Court
has recognized on several occasions that we have the inherent
authority to decide a case on grounds not raised in the notice of
deficiency and will do so if petitioner is not surprised or
prejudiced by the ground. See Seligman v. Commissioner, 84 T.C.
191, 198 (1985), affd. 796 F.2d 116 (5th Cir. 1986); Estate of
Horvath v. Commissioner, 59 T.C. 551, 555 (1973); Barr v.
Commissioner, T.C. Memo. 1989-69 n.24; Gmelin v. Commissioner,
T.C. Memo. 1988-338 n.18, affd. without published opinion 891
F.2d 280 (3d Cir. 1989).1
Petitioner bears “the burden of clearly showing the right to
the claimed deduction”. INDOPCO, Inc. v. Commissioner, 503 U.S.
79, 84 (1992). In order for us to decide that petitioner is
entitled to a current business expense deduction under section
162(a), petitioner must establish that the fees: (1) Did not
create or enhance a separate or distinct asset;2 (2) did not
1Where the record contains sufficient facts to permit us to
decide a case on an issue that would dispose of it, we shall do
so, regardless of whether the parties have pleaded the issue.
See Rendina v. Commissioner, T.C. Memo. 1996-392; Barnette v.
Commissioner, T.C. Memo. 1992-595, affd. without published
opinion sub nom. Allied Management Corp. v. Commissioner, 41 F.3d
667 (11th Cir. 1994); see also Park Place, Inc. v. Commissioner,
57 T.C. 767, 768-769 (1972).
2See Commissioner v. Lincoln Sav. & Loan Association, 403
U.S. 345, 354 (1971).
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