Sam F. and Ingrid D. Ford - Page 23

                                       - 23 -                                         
               Petitioners' reply to respondent's motion finds it "rather             
          absurd" that respondent has sought information from petitioners             
          regarding the contents of the deficiency notice.  Petitioners'              
          reply, however, does not deny that during the April 30 conference           
          call, petitioners' counsel did, in fact, state that the $2.8                
          million addressed in petitioner's allocution was not included in            
          the $5 million determined deficiency.  Accordingly, petitioners'            
          reply does not contravene, and may in fact support, respondent's            
          assertion that petitioners may be liable for taxes on an                    
          additional $2.8 million in unreported income.                               
               The matter should be sorted out, and, because it may involve           
          an increase to the determined deficiency, the proper way to                 
          address it is through an amendment to the pleadings, under Rule             
          41.  We are mindful of petitioners' general complaints of                   
          prejudice should we grant respondent's motion, and we are aware             
          that respondent did not file the proposed amendment until 9                 
          months after the telephone conference call with the Court.                  
          Although unexplained, the delay does not appear particularly                
          harmful when compared to the time this case has already consumed,           
          and although petitioners complain that allowing the proposed                
          amendment may require further efforts on their part, we do not              
          think that possibility would be unduly prejudicial to them.  The            
          instant case has not been tried, nor is there a date set for a              
          trial.  Moreover, Rule 142 places upon respondent the burden of             

Page:  Previous  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  22  23  24  25  Next

Last modified: May 25, 2011