Court Opinion

ID: 8913063
Source: CourtListenerOpinion
Date Created: 2022-11-27 03:49:51.723556+00
Date Added: 2024-06-11T17:08:42.873789
License: Public Domain

CHAMBERS, Circuit Judge,
dissenting:
I dissent. The bulk of the majority opinion is addressed to findings of fact made by *1391the Tax Court, and as there is substantial evidence to support those findings, this Court should not interfere. Geneva Drive In Theatre, Inc. v. C.I.R., 622 F.2d 995 (9th Cir. 1980). The Tax Court judge found that the Commissioner failed to inform the taxpayers of his intent to rely on Section 482 in the deficiency notices, even though the April 1976 revenue agent’s reports had suggested that adjustments to the taxpayers’ income accounts should be made, based on Section 482. The Tax Court judge found specifically that the deficiency notices did not incorporate the agent’s reports and that the taxpayers were not, in fact, on notice of the Commissioner’s intent to rely on Section 482. Thus, Rubin v. C.I.R. and C.I.R. v. Stewart, cited by the majority, do not apply. Moreover, the record shows that the' taxpayers had repeatedly asked the Commissioner to state his theory of the case but as of two weeks before trial, counsel for the Commissioner could not define it. And the taxpayers were not told of the intent to rely on Section 482 until five days before trial. If the Commissioner did not know he was relying on Section 482 until five days before trial, I have difficulty saying the taxpayers should have been on notice by references in a revenue agent’s reports two years earlier.1 The record also shows that the Tax Court judge made findings that the Commissioner was pleading “new matter” at the eleventh hour and that under Rule 142(a) of the Tax Court rules the burden of proof was therefore on the Commissioner. Again, we have findings of fact in which we should not interfere.
Finally, I cannot agree that it was court error to exclude from evidence binders which contained much irrelevant (as well as some relevant) evidence. The Commissioner’s attorney could have separated the irrelevant material from the relevant; he was not entitled to have the binders admitted in toto.
I would affirm.

. “Trial by ambush may produce good anecdotes for lawyers to exchange at bar conventions, but tends to be counter-productive in terms of judicial economy.” United States v. Cook, 608 F.2d 1175, 1186 (9th Cir. 1979) (en banc).