Evans Publishing, Inc. - Page 15




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          books, petitioner produce “voluminous” records, petitioner meet             
          with respondent to discuss the merits of the issues, petitioner             
          and respondent stipulate facts, petitioner submit a trial                   
          memorandum and posttrial brief, and petitioner spend substantial            
          time preparing for trial.  Petitioner claims that respondent’s              
          affirmative allegations will prejudice petitioner by requiring it           
          to expend unnecessary and duplicative attorney’s fees defending             
          itself from allegations that respondent previously examined and             
          specifically rejected.  Respondent contends that the fact that              
          petitioner may incur additional attorney’s fees to enable its               
          counsel to address the issue of Mr. and Mrs. Evans’ employment              
          status does not merit striking paragraphs 9 and 10 of the second            
          answer.                                                                     
               After weighing petitioner’s claim of prejudice against                 
          respondent’s claim that the affirmative allegations should be               
          tried, we conclude that the fact that petitioner will have to be            
          prepared at trial to counter respondent’s assertion that                    
          petitioner compensated Mr. and Mrs. Evans through the payment of            
          commissions, personal expenses, and other wages disguised as                
          shareholder loans is not prejudicial to petitioner and is not a             
          sufficient basis for granting the motion to strike in this case.            
          Estate of Jephson v. Commissioner, supra at 1003 (alleged                   
          prejudice of having to adduce evidence at trial to counter the              
          Commissioner’s assertion is insufficient to grant motion to                 






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