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that the claimed deductions would give rise to a substantial
understatement. Specifically, petitioner contends that our
holding in Pierce I, that the Pierces were not liable for
negligence penalties because of their reliance on the advice of
their accountants/return preparers, is tantamount to showing that
petitioner was uninformed or had no reason to know about tax
matters. Petitioner, however, did not plead collateral estoppel
as an affirmative defense in her petition. The defense of
collateral estoppel was raised, for the first time, in
petitioner’s opening statement at the beginning of the trial.
Respondent did not object at the time petitioner raised
collateral estoppel. However, on brief respondent argued that he
is not collaterally estopped because petitioner failed to plead
collateral estoppel as an affirmative defense as required by Rule
39. Respondent argues that petitioner’s failure to plead
collateral estoppel is, in effect, a waiver of that defense.
Petitioner contends that the issue of collateral estoppel is in
controversy because of respondent’s implied consent in accord
with Rule 41(b)(1). Alternatively, respondent argues that
petitioner failed to meet the procedural or substantive
requirements for collateral estoppel.
B. Implied Consent
Rules 34 and 36 provide for the initial pleadings, by which
most issues are placed in controversy. Rule 34(b)(4) requires
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