Court Opinion

ID: 6499425
Source: CourtListenerOpinion
Date Created: 2022-07-12 19:01:22.814168+00
Date Added: 2024-06-11T09:12:36.333755
License: Public Domain

United States Tax Court

                          T.C. Memo. 2022-71

 TBL LICENSING LLC f.k.a. THE TIMBERLAND COMPANY, AND
         SUBSIDIARIES (A CONSOLIDATED GROUP),
                          Petitioner

                                    v.

            COMMISSIONER OF INTERNAL REVENUE,
                       Respondent 1

                               —————

Docket No. 21146-15.                                  Filed July 12, 2022.

                               —————

             P and R each moved for summary judgment on
      issues regarding the application of I.R.C. § 367(d), which
      they presented as the sole issues in the case requiring
      resolution. The Court resolved those issues in TBL
      Licensing LLC & Subs. v. Commissioner, No. 21146-15, 158
      T.C. (Jan. 31, 2022). In March 2022, more than 6½ years
      after filing its Petition, P moved for leave to amend its
      Petition to assert a claim for a research credit under I.R.C.
      § 41. R opposes P’s Motion.

             Held: Whether justice requires granting a motion
      for leave to amend a pleading under Rule 41(a) depends on
      the facts and circumstances of the particular case; no one
      factor (such as the presence or absence of prejudice to the
      nonmoving party) is determinative.

            Held, further, when prejudice to the nonmoving
      party is taken into account, the relevant analysis is not
      limited to the incremental burden the nonmovant would
      bear as a result of the delay in consideration of the issue;

      1 This Memorandum Opinion supplements our prior Opinion TBL Licensing

LLC & Subs. v. Commissioner, No. 21146-15, 158 T.C. (Jan. 31, 2022).

                            Served 07/12/22
                                          2

[*2]   the absolute burden (on both the nonmovant and the
       Court) can also be considered.

              Held, further, P’s failure to offer any explanation for
       its lengthy delay in raising its claim to a research credit
       provides a sufficient ground, by itself, for denying P’s
       motion; that consideration of P’s claim could impose a
       considerable burden on R and the Court that would likely
       be greater than if P had raised its claim at the outset of the
       case provides even further grounds for the conclusion that
       justice does not require granting P’s motion.

                                    —————

James P. Fuller, Kenneth B. Clark, Larissa B. Neumann, Julia V.
Ushakova-Stein, Sean P. McElroy, Rajiv Madan, and Nathan P. Wacker,
for petitioner.

John E. Budde, Gretchen A. Kindel, Kimberly B. Tyson, and James M.
Cascino, for respondent.

              SUPPLEMENTAL MEMORANDUM OPINION

      HALPERN, Judge: This case is before us on petitioner’s Motion
for Leave to Amend Its Petition (Motion for Leave or Motion). For the
reasons explained below, we will deny petitioner’s Motion.

                                    Background

      In our prior Opinion in the case, we resolved in respondent’s favor
the two issues that the parties had assured us, in respective Motions for
Summary Judgment, were the only issues for decision. In particular,
we concluded that (1) petitioner is required to recognize ordinary income
for its taxable year ended September 23, 2011, under section
367(d)(2)(A)(ii)(II) 2 as a result of a constructive transfer of intangible
property to a foreign corporation and (2) in computing the amount of
income recognized, the value of the transferred properties had to be

        2 Unless otherwise indicated, all statutory references are to the Internal

Revenue Code, Title 26 U.S.C., in effect for 2011, all regulation references are to the
Code of Federal Regulations, Title 26 (Treas. Reg.), in effect for 2011, and all Rule
references are to the Tax Court Rules of Practice and Procedure.
                                           3

[*3] determined on the basis of their actual useful lives, without regard
to a 20-year limitation provided, for other purposes, in Temporary
Treasury Regulation § 1.367(d)-1T(c)(3). On February 9, 2022, we
entered an Order and Decision that purported to sustain the deficiency
that respondent had determined in a notice of deficiency for the taxable
year in issue.

       On March 4, 2022, respondent filed a Motion asking us to vacate
the February 9th Order and Decision and replace it with one that states
the amount of the upheld deficiency (rather than simply cross-
referencing the notice of deficiency). Petitioner opposed respondent’s
Motion to Vacate, alleging that the deficiency should be reduced by a
research credit petitioner claimed under section 41 in an amended
return petitioner apparently filed in June 2015, after respondent had
issued the notice of deficiency but before petitioner had petitioned this
Court for redetermination of the deficiency. 3 Petitioner had not made
any claim to a research credit for the taxable year in issue in its Petition
or at any other time before March 8, 2022, when petitioner responded to
respondent’s Motion to Vacate.

      In an order dated March 14, 2022, we granted in part
respondent’s Motion to Vacate in that we vacated and set aside so much
of our February 9 Order and Decision as sustained the deficiency
determined in the notice of deficiency. We refrained from entering a
new Order and Decision to give petitioner the opportunity to make “an
appropriate motion.”

      Petitioner filed its Motion for Leave, seeking to raise its claim to
a research credit, on March 25, 2022. Respondent objects to petitioner’s
Motion.

                                     Discussion

I.      Standards for Amending Pleadings

       As we explained in Markwardt v. Commissioner, 64 T.C. 989, 997
(1975), we “will not consider issues which have not been pleaded.”
Petitioner implicitly acknowledges our long-established practice by

        3 The parties stipulated that “Petitioner did not file any amended Form 1120

corporate tax return for its short taxable year ended September 23, 2011.” In his
objection to petitioner’s Motion for Leave, however, respondent states that, in June
2015, “Petitioner filed with respondent’s service center a Form 1120X that for the first
time notified respondent of petitioner’s claim for tax year 2011 research credits.”
                                    4

[*4] seeking to amend its Petition to raise the issue of its entitlement to
a research credit for 2011.

       Rule 41(a) allows a party to amend its pleading as a matter of
right before service of a responsive pleading. Amending a pleading (such
as a petition) after service of a responsive pleading (such as an answer)
requires leave of the Court unless the opposing party consents to the
proposed amendment. But Rule 41(a) directs us to give leave “freely
when justice so requires.”

       “[D]etermining the justice of a proposed amendment” requires an
“examin[ation of] the particular circumstances in the case.” Estate of
Quick v. Commissioner, 110 T.C. 172, 178 (1998), supplemented by 110
T.C. 440 (1998). Among the circumstances considered are “whether an
excuse for the delay [in raising the issue] exists and whether the
opposing party would suffer unfair surprise, disadvantage, or prejudice
if the motion to amend were granted.” Id. We also take into account
whether the issue sought to be raised would require the consideration of
“stale evidence,” the availability of relevant witnesses or documents, the
time passed since the party’s initial pleading, the “remoteness in time of
[the] taxable years involved in the underlying dispute, or [the]
completion of discovery and/or trial.” Scar v. Commissioner, 81 T.C. 855,
867 (1983) (Swift, J., concurring), rev’d on other grounds, 814 F.2d 1363
(9th Cir. 1987).

II.   The Parties’ Arguments

      A.     Petitioner’s Motion

       Petitioner asserts that a movant can be “denied the opportunity
to amend a pleading only where the amendment would prejudice the
other party.” It alleges that “[n]o such prejudice exists in this case” and
that, consequently, “justice is best served by allowing [it] to assert its
claim to the section 41 tax credits.” According to petitioner, the research
credit it seeks is not only “specifically authorized by Congress” but is
also “consistent with a previous agreement with Respondent on the
same issue for other tax years.”

       Petitioner claims that “[r]espondent would not suffer surprise
because he has known about th[e] [research credit] issue for nearly
seven years.” Petitioner contends that, under our caselaw, “prejudice
arises only where the proposed amendment creates a burden that would
not have existed if the issue were raised in the original pleading.” The
absence of a “factual overlap” between petitioner’s claim to a research
                                    5

[*5] credit and the section 367(d) issues resolved in our prior Opinion
establishes, in petitioner’s view, that “no such additional burden exists.”
The independence of the issues means that “there would have been no
efficiencies created if Petitioner had raised the issue earlier.” Whatever
difficulties might be imposed on respondent and the Court in addressing
the research credit issue, petitioner suggests, they would be no greater
than if it had made its claim for a credit at the outset of the case.

       Petitioner dismisses concerns about judicial economy on the
ground that “there has been no trial in this case.” Respondent can be
given “as much time as he needs to consider Petitioner’s entitlement to
the tax credits.”

       Petitioner acknowledges that “‘undue delay’ may be a factor in
deciding whether to grant a motion to amend a pleading” but insists that
“delay is not by itself a justification for denying leave to amend.”
Quoting (with added emphasis) our opinion in Nolte v. Commissioner,
T.C. Memo. 1995-57, 1995 WL 37631, at *3, aff’d, 99 F.3d 1146 (9th Cir.
1996), petitioner reminds us that “an untimely amendment may
properly be denied where there is no excuse for delay and there is
prejudice or substantial inconvenience to the adverse party.” From that
proposition, petitioner draws the conclusion that its Motion for Leave
“should be denied only if Respondent can demonstrate prejudice
resulting from allowing Petitioner to raise the section 41 issue at this
time.”

       Apparently relying on “Respondent’s history of allowing [it] to
claim” what it describes as “the same tax credits on the same basis for
other tax years,” petitioner assures us that “the question of whether [it]
is entitled to the additional tax credits can be decided quickly and
without any significant delay.” Toward that end, it vows to “promptly
provide to Respondent any additional support needed to verify [its]
entitlement to the additional tax credits.”

      B.     Respondent’s Objection

       Respondent points out that petitioner, in its Motion for Leave,
“offered no explanation of or justification for its failure to timely
prosecute” its research credit claim. Respondent asks that, if we grant
petitioner’s Motion, we also give respondent leave to amend his Answer
to raise a new issue of his own that, he says, would increase
                                    6

[*6] petitioner’s deficiency even if we allow petitioner the research
credits it claims.

       Respondent presents a history of the case in which, “at every
critical moment,” petitioner remained silent in regard to its claim for a
research credit. Petitioner’s repeated failures to raise the issue,
respondent asserts, “became an admission that the research credit claim
had been abandoned.”

       According to respondent, his counsel and petitioner’s counsel first
discussed the case in a phone call in October 2015. At that time,
respondent’s counsel was apparently aware of petitioner’s claim to a
research credit. In that initial call, respondent’s counsel asked
petitioner’s counsel whether petitioner planned to amend its Petition to
raise the research credit claim. A few days later, after discussing the
matter with their client, petitioner’s counsel allegedly advised
respondent’s counsel that petitioner had no plans to amend its Petition.

        The case was then sent to respondent’s Appeals office. Appeals’
consideration of the case was apparently limited to the applicability of
section 367: Petitioner did not raise the research credit issue in its
initial protest or at any other time while the case was before Appeals.

       In March 2019, however, petitioner did amend its Petition. But
its Amended Petition—raising the 20-year useful life limitation
provided in prior regulations—addressed only the amount of gain it
should be required to recognize were section 367’s gain recognition rule
determined to apply. Petitioner’ s Amended Petition made no mention
of the research credit. Thereafter, petitioner joined respondent in
advising the Court that resolution of the section 367 issue would fully
dispose of the case. During a conference call on July 10, 2019, “the
parties expressly advised the Court that the case could be disposed of in
its entirety by cross motions for summary judgment.”

       Respondent also offers reasons why addressing the research
credit issue at this stage in the case would be more difficult than if
petitioner had raised the issue at the outset. Those involved in the
examination of petitioner’s prior research credit claims, for example,
may have retired or been reassigned.

      C.     Petitioner’s Response to Respondent’s Objection

      Petitioner devotes most of its response to respondent’s objection
arguing that, if we were to grant its Motion and allow it to put before us
                                   7

[*7] its claim to a research credit for 2011, we should nonetheless not
allow respondent to raise the new issue he described in his objection.
Petitioner makes no arguments in support of its own Motion beyond
those made in the Motion itself. Moreover, petitioner again offers no
explanation for its delay in seeking to raise the research credit issue.
Nor does it refute any of the procedural background respondent provides
in his objection to petitioner’s Motion.

III.   Analysis

        The argument petitioner advances in support of its Motion can be
distilled to three points. First, undue delay in raising an issue cannot,
by itself, be grounds to deny a motion for leave to amend a pleading;
instead, such a motion can be denied only if the nonmoving party would
be prejudiced. Second, prejudice to the nonmoving party must be
measured on an incremental basis, comparing the burden that party
would have to bear in addressing the belatedly raised issue to the
burden that party would have borne if the issue had been raised at the
outset of the case. And third, respondent would bear no incremental
burden in this case because the research credit issue is completely
independent of the section 367(d) issues addressed in our prior Opinion.
As explained below, we disagree with petitioner on all three points.

       A.    Prejudice as the Sole Ground for Denial of a Motion for
             Leave to Amend a Pleading

      Petitioner’s claim that prejudice is the sole ground that justifies
denial of a motion for leave to amend a pleading misreads our caselaw.
In Ax v. Commissioner, 146 T.C. 153, 166–67 (2016), one of the cases on
which petitioner relies, we wrote that “prejudice to the non-moving
party is one of the reasons to disallow an amendment to the movant’s
pleadings.” (Emphasis added.) We thus recognized that other reasons
might also justify, in and of themselves, denial of a motion for leave to
amend a pleading.

      To say, as we did in Nolte, that a motion for leave to amend a
pleading can be denied when each of two factors (absence of excuse and
prejudice) is present does not mean that the motion must be granted
unless both factors are present. That absence of excuse and prejudice
are sufficient factors to justify denial of a motion for leave to amend a
pleading does not mean that either factor is necessary.

      The statement in Nolte on which petitioner relies draws a
conclusion from the opinion of the Supreme Court in Foman v. Davis,
                                     8

[*8] 371 U.S. 178, 182 (1962).        The following excerpt places the
statement in context:

      In Foman v. Davis . . . the Supreme Court stated that leave
      to amend may be inappropriate in cases where there is:

             any apparent or declared reason–such as
             undue delay, bad faith or dilatory motive on
             the part of the movant, repeated failure to
             cure deficiencies by amendments previously
             allowed, undue prejudice to the opposing
             party by virtue of allowance of the
             amendment, futility of the amendment, etc.
             ***

      Accordingly, an untimely amendment may properly be
      denied where there is no excuse for delay and there is
      prejudice or substantial inconvenience to the adverse
      party.

Nolte v. Commissioner, 1995 WL 37631, at *2–3. Foman suggested that
any one of several listed factors—including “undue delay”—could justify
a court’s denial of a motion for leave to amend a pleading. If any one of
those factors could justify denial of a motion, then, a fortiori, as we said
in Nolte, a trial court would not abuse its discretion in denying a motion
when two of those factors are present.

       In its Motion for Leave, petitioner offered us no explanation for
its having waited so long to raise its claim to a research credit for 2011.
In his objection to petitioner’s motion, respondent made allegations
indicating that petitioner made a considered decision not to raise the
research credit issue at each of several opportunities. In its response to
respondent’s objection, petitioner makes no effort to refute respondent’s
allegations, which we will therefore accept as accurately reflecting the
procedural history.

       Petitioner’s efforts to elevate prejudice or substantial
inconvenience as the sole dispositive factor, coupled with its repeated
failures to provide any explanation for its delay in raising before the
Court its claim to a research credit for 2011, convince us that petitioner
has no good excuse for its delay. In respondent’s unrefuted telling of the
procedural history, petitioner’s failure to have raised the research credit
issue reflects a conscious decision not to pursue the issue.
                                     9

[*9] Petitioner’s failure to advance any excuse for its delay in raising
the research credit issue gives us a sufficient basis for denying its motion
for leave. As noted above, the Supreme Court suggested in Foman that
“undue delay,” or any one of several other listed factors, could by itself
justify a court’s denial of a motion to amend a pleading. And this Court
confirmed in Chanik v. Commissioner, T.C. Memo. 1972-174, 31 T.C.M.
(CCH) 851, 864, aff’d, 492 F.2d 1182 (6th Cir. 1974), that a moving
party’s “lack of diligence” in raising an issue timely can be “a sufficient
reason to deny [a] motion to amend.”

      B.     Measuring Burden on          the   Nonmoving     Party:   Ax’s
             Incremental Analysis

       We need not rest our denial of petitioner’s Motion solely on its
inability to explain its belated efforts to put before us its claim to a
research credit. Consideration of petitioner’s claim could impose a
significant burden on both the Court and respondent. Claims for
research credits tend to be fact intensive. As we explained in Little
Sandy Coal Co. v. Commissioner, T.C. Memo. 2021-15, at *20:

              Given the complexity of factual issues involved in
      determining a taxpayer’s eligibility for the research credit,
      it is not unusual for the taxpayer and the Commissioner to
      agree, in conducting cases that involve the credit, to single
      out a sample of research projects to be addressed by the
      court in the expectation that the court’s decision in regard
      to the sample projects will enable the parties to resolve
      their differences in regard to the other projects.

       Petitioner’s claim for a research credit for 2011 cannot be
identical to the claims respondent allegedly allowed, at least in part, for
prior years. Repeating in 2011 the very research activities conducted in
prior years would have been pointless. Petitioner asks that we take its
word that its claim for a credit against its 2011 tax liability raises no
factual or legal issues not already considered and resolved in prior years.
Respondent advises us, however, that his agents have not examined
petitioner’s 2011 research credit claim. Because the research credit
claim has not previously been in the case, respondent’s counsel “did not
perform discovery on the research credit claim during the pendency of
this case.”     As respondent observes, “[p]etitioner has made no
demonstration of its entitlement to the claimed research credits.” We
cannot know, at this juncture, the extent to which respondent might
                                    10

[*10] agree to petitioner’s claim for a research credit or how difficult it
might prove to be to resolve any disagreements.

       Petitioner suggests that, however difficult resolution of the
research credit issue might be, it would be no more difficult now than if
petitioner had raised the issue in the petition it originally filed. Our
opinion in Ax provides some support for such an incremental analysis.
Ax was a captive insurance case involving taxpayers’ claims to
deductions for premiums paid to a related insurer. In the notice of
deficiency, the Commissioner disallowed the deductions because, he
alleged, the taxpayers had not demonstrated that the deductions
reflected expenses that had actually been paid. The Commissioner
sought to amend his answer to assert that the amounts in issue were
not “ordinary and necessary” within the meaning of section 162(a) and
also to challenge the economic substance of the captive insurance
arrangement.

       The taxpayers’ argument that the proposed amendment would
prejudice them amounted to a claim that the additional grounds for
denial of the deductions in issue would reduce their chances of
prevailing. They described as “very simple” the issues raised in the
notice of deficiency. Ax, 146 T.C. at 166. In its initial posture, the case
was, in the taxpayers’ words, “a straightforward expense substantiation
dispute.” Id. Simply proving payment, they reasoned, would have
allowed them to “easily prevail.” Id. By contrast, the taxpayers viewed
the new issues the Commissioner sought to raise as “very complicated,”
id., implicitly admitting that they were less likely to prevail on those
issues.

       In addressing the taxpayers’ argument, we made the obvious
point that “‘prejudice’ . . . does not mean mere disadvantage.” Id. at 168.
A party would not seek to amend its pleading unless it saw a potential
advantage in doing so. And an amendment that advantages the moving
party would necessarily disadvantage the party’s opponent. That the
issues that would be raised in an amended pleading “would make the
case harder or more expensive for the other party than a pleading that
lacks those issues,” we reasoned, does not establish prejudice for
purposes of Rule 41(a). Id. While we might have stopped there, we went
on to suggest the incremental analysis petitioner embraces: “[T]he
question is whether the addition of those new issues by a later
amendment, rather than by inclusion in the initial pleading, works an
unfair disadvantage to the other party.” Id.
                                   11

[*11] While Ax’s incremental analysis may be useful, it should not be
understood to render irrelevant the absolute burden the nonmoving
party would bear from consideration of the new issue or issues. In prior
cases, we emphasized the absolute burden the nonmoving party would
bear from consideration of a new issue without explicitly considering
how that burden might have been different (and lesser) had the movant
raised the new issue at the outset. In Wyman-Gordon Co. v.
Commissioner, T.C. Memo. 1985-433, 50 T.C.M. (CCH) 842, for example,
the Commissioner sought to amend his answer to allege that purported
loans made by one member of a consolidated group to its second-tier
subsidiary were in fact equity investments. The original issue in the
case had involved the excess loss account rules provided in Treasury
Regulation § 1.1502-19. In denying the Commissioner’s motion, we
observed: “[T]he debt-equity issue [the Commissioner] now seeks to
raise will not otherwise be litigated. Furthermore, it raises factual
questions involving evidence quite dissimilar from the legal analysis
which will be necessary to resolve the consolidated return issue.”
Wyman-Gordon Co., 50 T.C.M. (CCH) at 843. We accepted as “obvious”
that the “time and expense that would be incurred in litigating a debt-
equity question involving a $2,038,161 loan” would be “substantial.” Id.
Under the circumstances, there was no apparent reason to believe that
the time and expense of litigating the debt-equity issue would have been
any less substantial had the Commissioner raised the issue in his initial
answer, filed less than 11 months before his motion for leave to amend
that answer.

       Leahy v. Commissioner, 87 T.C. 56 (1986), involved investment
tax credits claimed in respect of a movie purchased by a partnership in
which the taxpayer-husband was a limited partner. In his notice of
deficiency, the Commissioner had advanced several grounds for
disallowing the credits. The parties submitted the case fully stipulated.
On brief, the Commissioner raised for the first time an additional
ground for disallowing the credits: the partnership and the taxpayers’
failure to attach to their returns a statement required by the
regulations. We acknowledged that “[i]t is within our discretion to
permit a new issue or ground if we find that the opposing party is not
prejudiced by such permission.” Id. at 64. “Of key importance in
evaluating the existence of prejudice,” we wrote, “is the amount of
surprise and the need for additional evidence on behalf of the party in
opposition to the new position.” Id. Because the Commissioner had not
raised the issue of compliance with the reporting requirement in the
notice of deficiency or in his pleadings, we accepted that the taxpayers
“were surprised to learn of respondent’s ‘regulation position’ on brief.”
                                    12

[*12] Id. The longer the delay in a party’s disclosing a new theory, we
reasoned, the greater the likelihood of prejudice to the other party. That
was “especially true” in Leahy, “where there was no trial and the facts
were fixed by agreement.” Id. at 65. We presumed that the parties’
submission of the case fully stipulated reflected “an understanding of
the legal issues to be presented and defended.” Id. at 64–65. A party’s
attempt to raise a new issue, we reasoned, is more likely to surprise his
opponent if the parties had previously reached an agreement that
circumscribed the relevant issues. We thus held that the taxpayers
“were surprised by the new ground and their ability to present their case
was prejudiced.” Id. at 65. The prejudice followed from the surprise.
We did not in Leahy engage in any explicit analysis of the incremental
burden on the taxpayers of the Commissioner’s having raised the
reporting issue on brief instead of in his initial answer.

       “Whether a motion seeking amendment [of a pleading] should be
allowed lies within the sound discretion of the Court.” Estate of Quick,
110 T.C. at 178. An appeals court will overturn a denial of leave to
amend “only for an abuse of that discretion.” Manzoli v. Commissioner,
904 F.2d 101, 107 (1st Cir. 1990), aff’g T.C. Memo. 1988-299. Given the
broad discretion allowed to a trial judge to determine, on the basis of the
particular facts and circumstances, whether a motion for leave to amend
a pleading should be granted in a case, Ax should not be read to have
established a hard and fast rule requiring the use of an incremental
analysis to measure prejudice. Moreover, as explained above, prejudice
to the nonmoving party is not, as petitioner would have it, a strict
prerequisite for denial of a motion for leave to amend a pleading. The
possibility of prejudice is simply one factor to be considered. It follows
that a trial judge has latitude to determine not only the weight to be
given to potential prejudice but also how that prejudice should be
measured.

      C.     Respondent’s Incremental Burden in the Present Case

      Even if a determination of prejudice were to require an
incremental analysis of the type suggested in Ax, we are convinced that
resolution of the research credit issue would be more difficult now than
would have been had petitioner raised the issue in its initial petition.
As noted above, we accepted in Leahy that the possibility of prejudice
varies directly with the extent of the delay in raising the new issue.
Recognition of that inevitable reality also influenced our decisions in
Estate of Ravetti v. Commissioner, T.C. Memo. 1992-697, 1992 WL
357823, and Nolte.
                                   13

[*13] Estate of Ravetti involved an executor’s motion for leave to amend
her petition to assert a statute of limitations defense. Although the
decedent had executed consents to extend the statute, the executor
claimed that the decedent had been incompetent when he did so. In
explaining our denial of the executor’s motion, we wrote:

             Under the circumstances of this case, we are not
      persuaded that justice would be served by allowance of the
      proposed amendment. Petitioner’s proposed amendment
      would substantially inconvenience and unfairly prejudice
      respondent. Amendment of the petition here would require
      respondent to contest the competency 9 years ago of a
      taxpayer now long deceased. Most, if not all, of the
      evidence bearing on Silvio Ravetti’s competence is under
      the control of and in the possession of petitioner.
      Petitioner’s amendment necessarily would require a new
      round of discovery relating to Silvio Ravetti’s mental
      competency in 1983. Respondent now would be required to
      locate witnesses and experts to testify regarding
      circumstances of 9 years ago. We do not believe that justice
      would be served by placing this burden on respondent at
      this time with respect to a consent on which respondent
      reasonably has relied for 9 years.

Estate of Ravetti v. Commissioner, 1992 WL 357823, at *2.

       Nolte also involved taxpayers’ belated attempt to raise the statute
of limitations as an affirmative defense. The Commissioner alleged that
the taxpayers had executed a Form 872–A, Special Consent to Extend
the Time to Assess Tax, consenting to extend the limitation period.
While she was unable to find an executed consent form in her files, she
said that her administrative file included “secondary evidence” of
execution of consents. Nolte v. Commissioner, 1995 WL 37631, at *2.

      We denied the taxpayers’ motion for leave to amend in Nolte,
reasoning that their “proposed amendment would substantially
inconvenience and unfairly prejudice” the Commissioner. Id. at *3.
“Amendment of the petition,” we observed, “would require [the
Commissioner] to locate witnesses to testify about events occurring
more than 8 years ago regarding the alleged execution of the Form
872–A for” the year in issue. Id.
                                   14

[*14] Allowing petitioner to amend its Petition would require
respondent to undertake an examination of petitioner’s entitlement to a
research credit for a taxable year that ended more than 10 years ago.
The prospect of stale evidence looms larger now than it would have had
petitioner given respondent reason to open an examination back in 2015.
Cf. Scar, 81 T.C. at 867 (Swift, J., concurring).

       Petitioner apparently expects that, upon a quick and relatively
effortless perusal of the documentation it promises to provide,
respondent will readily accept petitioner’s entitlement to the claimed
credit. We cannot share petitioner’s confidence.

       Petitioner’s apparent ability to have reached an agreement with
respondent concerning the allowance of research credits for years before
2011 does not establish that the parties would easily resolve any
differences in regard to petitioner’s 2011 claim. Petitioner advises us
that its 2011 claim “follows the same methodology” it used in claiming
credits for 2008 through 2010.          Petitioner provides no further
description of its “methodology.” Whatever petitioner means by that
term, its 2011 claim will necessarily involve facts that differ from those
considered in prior years. Those different facts may raise different legal
issues. And the relevant legal landscape may have changed in the many
intervening years.

      D.     Considerations of Judicial Economy

       Finally, we are unpersuaded by petitioner’s “judicial economy”
argument. Petitioner acknowledges that we have “denied motions to
amend pleadings that were filed after a trial based upon ‘the established
policy of this Court to try all the issues raised in a case in one
proceeding.’” The prospect that a posttrial motion for leave can properly
be denied does not establish that we have no choice but to grant a motion
for leave made in any case in which no trial has yet been held. Although
we resolved without trial the section 367(d) issues the parties presented
on summary judgment, the case required extensive proceedings up to
that point. The parties submitted thousands of pages of stipulated
documents in connection with their Motions for Summary Judgment.
The burden on the Court of resolving the section 367(d) issues was not
materially different because the parties submitted those documents by
stipulation rather than in a trial. In positing that respondent be given
“as much time as he needs to consider [its] entitlement to tax credits,”
petitioner, in effect, asks that we put on indefinite hold a case we have
already decided and require respondent to open, conduct, and complete
                                     15

[*15] an examination of a previously unexamined issue. Our caselaw
does not establish that parties are, in all events, entitled to one trial. In
several of the cases discussed above (Nolte, Wyman-Gordon Co., Leahy,
and Estate of Ravetti), we denied motions for leave to amend pleadings
in cases in which no trial had yet been held.

IV.   Conclusion

       In short, petitioner’s repeated failure to offer any explanation for
its lengthy delay in seeking to raise its claim to a research credit for the
taxable year in issue is sufficient justification, by itself, to warrant
denial of its motion. Moreover, considering petitioner’s claim to a
research credit more than 10 years after the close of the taxable year in
issue could impose a considerable burden on respondent and the Court–
a burden likely to be greater than it would have been had petitioner
raised the issue in the petition it filed more than 6½ years ago. Taking
into account “the particular circumstances in the case,” Estate of Quick,
110 T.C. at 178, we conclude that justice does not require granting
petitioner leave to amend its petition.

      An appropriate order and decision will be entered.