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Petitioners could have included the NOLs among the
“adjustments at issue in the administrative or court proceeding”
by the simple expedient of moving to amend their petitions to
claim the NOL deductions before, rather than after, making their
qualified offer. Had that motion been made and granted, which
under the postulated conditions would appear to have been likely,
cf. Cloes v. Commissioner, 79 T.C. 933 (1982), the NOLs would
have become an “adjustment at issue” for purposes of this court
proceeding. Instead of moving to amend the petitions before
making the qualified offer, petitioners waited until after
respondent accepted the qualified offer to move to amend their
petitions to claim the NOL deductions. These motions to amend
their petitions made after their qualified offer was accepted are
obviously too late. As we stated in Korangy v. Commissioner,
T.C. Memo. 1989-2, affd. 893 F.2d 69 (4th Cir. 1990): “The time
for petitioners to make a thorough examination of their case is
prior to the date of trial, not subsequent to their execution of
a settlement agreement.”
Petitioners assert that it would have been premature to
raise the issue of the NOLs prior to arriving at the agreement,
which included taxable income for the years in issue. Contrary
to this assertion, petitioners could have pleaded the NOL
deductions as an alternative position. Rule 31(c) allows
pleading in the alternative, and the Court generally requires it.
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