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combined discounts were less than 40 percent in some cases, and
that a more detailed breakdown was pending. Indeed, the only
“Current IRS Value[s]” that incorporated combined discounts of 40
percent were for interests in Eighty-Eight Oil and Black Hills
Trucking. Thus, as of the end of trial, the discounts that
respondent was conceding remained unclear. This lack of clarity
is further evidenced by the failure of the parties to include
stipulations regarding combined discounts in the joint
stipulations introduced by the parties after they had submitted
Exhibit 262-P to the Court.
More importantly, we do not believe that petitioners relied
on respondent’s statements regarding “Current IRS Value[s]” and
combined discounts in presenting their case. In Ware v.
Commissioner, 92 T.C. 1267, 1268 (1989), affd. 906 F.2d 62 (2d
Cir. 1990), we said:
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; see also Estate of Andrews v.
Commissioner, 79 T.C. 938, 952 (1982).]
Petitioners obtained expert appraisals for the subject
interests in all disputed companies, and their experts testified
at trial in support of their findings on entity values and
discounts. Petitioners appear to have accepted respondent’s
concessions regarding companies with “Current IRS Value[s]” that
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