Sam F. and Ingrid D. Ford - Page 21

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          Respondent's proposed amendment now seeks to assert that                    
          petitioners owe taxes on that additional $2.8 million of                    
          unreported income, plus additional penalties for fraud.                     
               Whether a motion seeking amendment should be allowed lies              
          within the sound discretion of the Court.  Rule 41(a); Estate of            
          Quick v. Commissioner, 110 T.C. 172, 178 (1998); Law v.                     
          Commissioner, 84 T.C. 985, 990 (1985).  In deciding the justice             
          of a proposed amendment, we must examine the particular                     
          circumstances in the case before us.  Estate of Quick v.                    
          Commissioner, supra; Law v. Commissioner, supra.  We consider,              
          among other factors, whether an excuse for the delay exists and             
          whether the opposing party would suffer unfair surprise,                    
          disadvantage, or prejudice if the motion to amend were granted.             
          Estate of Quick v. Commissioner, supra; Nolte v. Commissioner,              
          T.C. Memo. 1995-57, affd. without published opinion 99 F.3d 1146            
          (9th Cir. 1996); Estate of Ravetti v. Commissioner, T.C. Memo.              
          1992-697; Spain v. Commissioner, T.C. Memo. 1978-270.                       
               Respondent's motion appears to indicate a change in                    
          position.  In respondent's response to petitioners' Revised                 
          Interrogatory No. 40, respondent earlier indicated that, although           
          respondent lacks direct evidence that the $2.8 million from                 
          petitioner's allocution was included in computing the determined            
          deficiency, the circumstantial evidence that this amount has been           
          included is "compelling".  Our own review of respondent's                   

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