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Petitioner’s objections to the motion fall into three
categories. Petitioner argues: (1) Respondent is in violation
of the Court’s Rules, (2) respondent failed to exercise due
diligence, and (3) if the motion is granted, petitioner will be
unduly prejudiced in presenting his case.
Whether Respondent Has Complied With the Court’s Rules
Petitioner argues that respondent is in violation of Rule
39, which requires that a party set forth in his pleading special
matters, including fraud and collateral estoppel. Petitioner
argues that respondent pleaded collateral estoppel, but not
fraud, in his original answer. However, the answer specifically
states: “petitioner is liable for the civil fraud penalty
pursuant to I.R.C. section 6663 for taxable years 1996, 1998, and
1999”. In his answer, respondent relies on collateral estoppel.
In his motion for leave to file amendment to answer, respondent
merely seeks to include the facts necessary for a finding of
fraud without reliance on collateral estoppel. As respondent
alleged fraud in his answer, he has complied with Rule 39.
Petitioner alleges that respondent did not set forth the
reasons for the amendment as required by Rule 41(a). However,
the motion states that respondent seeks to set forth allegations
of facts surrounding the imposition of the civil fraud penalty
under section 6663. This is sufficient to comply with Rule
41(a).
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Last modified: March 27, 2008