Mazhar Tabrezi, f.k.a. Agha Hussain, and Sajida Razvi - Page 6

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          new matter.  In the posttrial brief, respondent conceded the                
          discharge of the other three mortgages did not result in COD                
          income because petitioners were insolvent on the calculation                
          dates and argued only for the inclusion of the Household Finance            
          debt in petitioners’ income.  Also, respondent conceded that he             
          failed to include the Household Finance mortgage in the notice of           
          deficiency.  Respondent did not attempt to amend any of his                 
          A.   Petitioners’ Argument That Respondent’s Addition of the                
               Fourth Adjustment Increases the Overall Deficiency                     
               Petitioners question whether respondent met the requirements           
          of section 6214(a), which provides:                                         
               SEC. 6214.  DETERMINATIONS BY THE TAX COURT.                           
                    (a) Jurisdiction as to Increase of Deficiency,                    
               Additional Amounts, or Additions to the Tax.--* * *                    
               [T]he Tax Court shall have jurisdiction to redetermine                 
               the correct amount of the deficiency even if the amount                
               so redetermined is greater than the amount of the                      
               deficiency * * * and to determine whether any                          
               additional amount, or any addition to the tax should be                
               assessed, if claim therefor is asserted by the                         
               Secretary at or before the hearing or a rehearing.                     
          Although respondent argued on brief that the Household Finance              
          mortgage gave rise to COD income without seeking to amend his               
          pleadings, see Henningsen v. Commissioner, 243 F.2d 954 (4th Cir.           
          1957), affg. 26 T.C. 528 (1956); Koufman v. Commissioner, T.C.              
          Memo. 1977-225; Mazzoni v. Commissioner, T.C. Memo. 1970-37,                
          supplemented T.C. Memo. 1970-144, affd. 451 F.2d 197 (3d Cir.               

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