Opinion
575-22S
05-09-2024
PHOEBE JONAS, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER
Jennifer E. Siegel, Special Trial Judge.
This deficiency case concerns petitioner's proper federal income tax liability for 2019. By Order issued February 9, 2024, we granted respondent's Motion for Partial Summary Judgment, determining that petitioner was not a "qualified performing artist" for tax purposes in 2019. On April 1, 2024, petitioner filed a Motion for Leave to File an Amended Petition and lodged her First Amended Petition. The Amended Petition presented a new theory of the case, the idea that petitioner's inter-related "global industry work" encompassed acting, performing, coaching, and writing, and that the talent agent commissions paid during 2019 were thus a deductible business expense.
On April 30, 2024, respondent filed an Objection to petitioner's Motion. We are unpersuaded that petitioner's motion should be denied because respondent's view is that petitioner may not prevail on the merits.
The important question here is whether the amendment "works an unfair disadvantage to the other party." Ax v. Commissioner, 146 T.C. 153, 168 (2016); see also, e.g., Estate of Strangi v. Commissioner, 293 F.3d 279, 281 (5th Cir. 2002) aff'g in part, rev'g in part, and remanding 115 T.C. 478 (2000). It does not.
Whether a motion seeking amendment should be allowed lies within the sound discretion of the Court. Rule 41(a), Tax Court Rules of Practice and Procedure; Law v. Commissioner, 84 T.C. 985, 990 (1985). We are permissive in allowing amendments, and Rule 41(a) provides that we will approve amendments "freely when justice so requires." This phrasing reflects "a liberal attitude toward amendment of pleadings." Notes to the Rule of Practice & Procedure of the United States Tax Court, 60 T.C. 1057, 1089 (1973). Respondent does not allege surprise or substantial disadvantage, and this case is not calendared for trial.
Upon due consideration, it is therefore
ORDERED that petitioner's Motion for Leave to File an Amended Petition is granted in that the First Amended Petition lodged April 1, 2024, is filed as of the date of this Order as petitioner's First Amendment to Petition. It is further
ORDERED that respondent shall, on or before July 8, 2024, file a responsive amendment to answer. Respondent need only address new allegations made in the First Amendment to Petition; arguments made in the original Petition filed January 18, 2022, need not be addressed. It is further
ORDERED that jurisdiction of this case is no longer retained by the undersigned, and the case is restored to the general docket.