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answer. Respondent seeks to set forth facts regarding the
determination of the civil fraud penalties without reliance on
collateral estoppel. On May 31, 2007, petitioner filed his
objection to respondent’s motion for leave to file amendment to
answer. On October 15, 2007, hearing was held on the motion in
San Francisco, California.
Discussion
Rule 41 governs amended and supplemental pleadings. Rule
41(a) covers amendments generally and provides in effect that
after a responsive pleading is served or after 30 days if no
responsive pleading is permitted, “a party may amend a pleading
only by leave of Court or by written consent of the adverse
party, and leave shall be given freely when justice so requires.”
Rule 41(a) reflects “a liberal attitude toward amendment of
pleadings.” 60 T.C. 1089 (explanatory note accompanying
promulgation of Rule 41). Because the parties have framed this
issue as though leave were necessary for respondent to amend his
answer, we will assume arguendo that it is.
Whether leave will be granted to file an amendment to answer
is a question falling within the sound discretion of the Court,
and the disposition of such a motion turns largely on whether the
matter is raised timely so as not to prejudice the taxpayer.
Waterman v. Commissioner, 91 T.C. 344, 349-350 (1988); Ross Glove
Co. v. Commissioner, 60 T.C. 569, 595 (1973).
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