Opinion
12362-21
03-26-2024
BEAVERDAM CREEK HOLDINGS, LLC, BEAVERDAM CREEK INVESTORS, LLC, TAX MATTERS PARTNER, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER
Joseph Robert Goeke, Judge
Pending before the Court is petitioner's Motion in Limine to Exclude Evidence Relating to Partner Status, which was Raised in respondent's Pretrial Memorandum, and Incorporated Memorandum of Law, filed March 1, 2024, as supplemented on March 6, 2024. On March 11, 2024, trial in this case commenced in Atlanta, Georgia. On March 13, 2024, both parties were heard on the above-reference motion. Respondent is considered to have raised a new matter when his new argument or theory requires the presentation of different evidence. See Shea v. Commissioner, 112 T.C. 183, 191 (1999). However, a new argument or theory that merely clarifies or develops the original determination is not a new matter. Id.; Wayne Bolt & Nut Co. v. Commissioner, 93 T.C. 500, 507 (1989).
It is most appropriate for respondent to assert his legal theories in the FPAA or his pleadings. However, we will not generally preclude him from advancing a new matter during the proceeding of the case unless the new matter would cause petitioner to experience unfair prejudice or surprise. Dirico v. Commissioner, 139 T.C. 396, 415-417 (2012); Ware v. Commissioner, 92 TC. 1267, 1269 (1989).
In respondent's pretrial memorandum, respondent first raises the possibility of the argument at issues as follows: "Alternatively, limited to its basis under I.R.C. § 170(e)(1)(A) because SSO and SGC were not a bona fide partnership." This argument is simply raised too late.
We find that petitioners are unduly prejudiced or surprised by respondent's argument that the partnership was not bona fide for its previous short taxable year. Upon due consideration of the foregoing, and for cause more fully appearing in the transcript of the proceedings, it is
ORDERED that petitioner's Motion in Limine to Exclude Evidence Relating to Partner Status, which was Raised in respondent's Pretrial Memorandum, and Incorporated Memorandum of Law, as supplemented, is granted.