DocketNumber: Docket No. 16521-84
Citation Numbers: 60 T.C.M. 1463, 1990 Tax Ct. Memo LEXIS 713, 1990 T.C. Memo. 638
Judges: HAMBLEN
Filed Date: 12/19/1990
Status: Non-Precedential
Modified Date: 11/20/2020
*2101 SUPPLEMENTAL MEMORANDUM OPINION
This matter is before the Court on respondent's motion for reconsideration filed pursuant to Rule 161. 1 The merits of this case were decided in
In
On October 18, 1990, respondent filed*715 a motion for reconsideration and a memorandum in support of the motion. On October 26, 1990, petitioner filed a motion to strike two contentions raised in respondent's motion for reconsideration. On November 2, 1990, respondent filed a notice of objection to petitioner's motion to strike. On November 8, 1990, petitioner filed a response to respondent's reply to petitioner's motion to strike.
In his motion for reconsideration respondent sets forth eight grounds in support of his contention that the Court's opinion in this case is in error. Respondent argues that: (1) foreign law is immaterial with respect to the application of
The granting of a motion for reconsideration rests within the discretion of the Court. The Court generally denies reconsideration of proceedings already concluded unless unusual circumstances or substantial error is shown.
As a preliminary point, we note that two of the grounds contained in respondent's motion for reconsideration represent new matters in this litigation. See
Consistent with the spirit of the rules of pleading of this Court, the taxpayer is entitled to notice of the grounds upon which respondent's deficiency determination is based. As a general rule, such notice may be provided in the notice of deficiency or in respondent's answer to the petition for redetermination. See
In
The fundamental purpose of pleadings is to inform the parties, and the Court, of the issues involved, and certainly the taxpayer is entitled to know, at least by the date of the hearing, the ground upon which the Commissioner has acted and the contention which he is required to meet in order to establish the error of the determination. The respondent cannot be allowed to profit by a contention, made long after the testimony has been heard, based upon a failure of proof of a fact which was not, in any practical sense, put in issue by the pleadings, and which was not germane to any theory theretofore advanced by respondent or even mentioned by respondent's counsel at the trial * * *.
As was the case in
The issue framed by the statutory notice and tried by this Court related solely to an allocation of income from Espana to AG pursuant to
During the years ended June 30, 1978 and June 30, 1979, Procter and Gamble A.G. made available to Procter and Gamble Espana, S.A. certain patents, trademarks, manufacturing know-how, technical services and other valuable intangibles without arm's length consideration.
There was no mention in any of the pleadings filed in this case of an allocation of AG's deductions to Espana, nor of the effect of section 162 on AG's transactions. Moreover, there was no reference to facts pertinent to those issues in the stipulation of facts submitted by the parties. Finally, the issues were not raised by respondent during his opening statements at trial, nor in his post-trial briefs.
Petitioner asserts that it had no prior notice whatsoever of the issues in question and respondent does not allege otherwise. Thus, to allow respondent to litigate these new matters at such a late date would certainly prejudice petitioner and place petitioner at a disadvantage. In particular, respondent's delay in raising the issues in question denied petitioner the opportunity to address the issues at trial and on brief. There has to be a point at which*721 respondent is bound by his pleadings if tax controversies are to be expeditiously resolved, and we have already passed that point.
Respondent cites
*722 While there can be no debate, as a general matter, that Congress controls the taxing power of the United States, our opinion in this case does not improperly ignore domestic tax concepts with respect to the scope and application of
The remainder of respondent's contentions in his motion for reconsideration are points which the Court considered prior to issuing its original opinion in this case. While respondent's concerns are not without merit, the Court*723 is both compelled and obligated to follow the precedent of the Supreme Court in
Respondent's remedy is to pursue an appeal in due course or to seek legislative clarification. Accordingly, respondent's motion for reconsideration is denied. In addition, petitioner's motion to strike is denied as moot.
To reflect the foregoing,
1. All Rule references are to the Tax Court Rules of Practice and Procedure and unless otherwise indicated, all statutory references are to the Internal Revenue Code of 1954 as in effect for the years in issue.↩
Robin Haft Trust v. Commissioner of Internal Revenue , 510 F.2d 43 ( 1975 )
milton-j-seligman-and-estate-of-francine-seligman-v-commissioner-of , 796 F.2d 116 ( 1986 )
U.S. Padding Corp. v. Commissioner of Internal Revenue , 865 F.2d 750 ( 1989 )
Salyersville National Bank v. United States , 613 F.2d 650 ( 1980 )
commissioner-of-internal-revenue-v-transport-manufacturing-and-equipment , 478 F.2d 731 ( 1973 )
Commissioner v. First Security Bank of Utah, N. A. , 92 S. Ct. 1085 ( 1972 )