Opinion
22623-21
02-29-2024
FRANCISCO A. GOMEZ REYES & BRIANNA S. KELLEY, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER
Adam B. Landy Special Trial Judge
This deficiency case is before the Court on Ms. Kelley's Motion for Leave to File First Amendment to Petition, filed January 26, 2024, and Mr. Gomez-Reyes' Motion to Strike, filed February 20, 2024. The Commissioner does not object to the Court granting the Motion for Leave. According to Mr. Gomez-Reyes, the Commissioner has not expressed a view on the disposition of the Motion to Strike.
For the reasons stated below, we will grant Ms. Kelley's Motion for Leave, therewith filing the First Amendment to Petition, and we will deny Mr. Gomez-Reyes' Motion to Strike.
Background
The following facts are derived from the pleadings, and the parties' motion papers. Mr. Gomez-Reyes and Ms. Kelley resided in Oklahoma when the Petition was filed.
On January 26, 2024, Ms. Kelley filed a Motion for Leave to File First Amendment to Petition and lodging therewith a First Amendment to Petition. Ms. Kelley seeks leave of the Court to assert that she is entitled to innocent spouse relief as a defense to the proposed deficiency, civil fraud penalty, and addition to tax for taxable years 2017 and 2018. On February 20, 2024, Mr. Gomez-Reyes filed a Motion to Strike, which is more akin to an Objection to the Court granting Ms. Kelley's Motion for Leave, insofar as he disputes many of the allegations raised in the motion for leave, asserting a request for innocent spouse relief.
Discussion
I. Motion for Leave to File First Amendment to Petition
Rule 41(a) provides that "a party may amend a pleading only by leave of Court or by written consent of the adverse party, and leave shall be given freely when justice so requires." This rule reflects a liberal attitude towards amendment of pleadings. See Foman v. Davis, 371 U.S. 178, 182 (1962); see also Shang v. Commissioner, T.C. Memo. 2008-69, 2008 WL 724034, *1 (citation omitted). Whether leave to file an amendment will be granted is a question falling within the sound discretion of the Court. Estate of Quick v. Commissioner, 110 T.C. 172, 178 (1998), supplemented by 110 T.C. 440 (1998); Law v. Commissioner, 84 T.C. 985, 990 (1985). An important factor in deciding whether leave will be granted is the existence of unfair surprise or prejudice to the nonmoving party. Estate of Quick, 110 T.C. at 178-80; Law, 84 T.C. at 990.
Given the liberality of Rule 41, the circumstances of this proceeding do not meet the requisite prejudice or delay to justify the denial of Ms. Kelley's motion. The lodged First Amendment to Petition will not require substantially new trial preparation by Mr. Gomez-Reyes or the Commissioner, and it does not "surprise and/or unfairly disadvantage" Mr. Gomez-Reyes as this case proceeds to trial or a resolution by the parties. See Estate of Quick, 110 T.C. at 180. This case is not set for trial in Oklahoma City, Oklahoma, and Mr. Gomez-Reyes and the Commissioner will have ample time to prepare and to conduct additional discovery to defend themselves against the new issue. Therefore, we will grant the Motion for Leave and direct the Clerk of Court to file the First Amendment to Petition.
II. Motion to Strike
Rule 52 provides that "the Court may order stricken from any pleading ... any redundant, immaterial, impertinent, frivolous, or scandalous matter." In Estate of Jephson v. Commissioner, 81 T.C. 999 (1983), this Court set forth various principles to consider when deciding a motion to strike.
Matter will not be stricken from a pleading unless it is clear that it can have no possible bearing upon the subject matter of the litigation. A motion to strike should be granted only when the allegations have no possible relation to the controversy. When the court is in doubt whether under any contingency the matter may raise an issue, the motion should be denied. If the matter that is the subject of the motion involves disputed and substantial questions of law, the motion should be denied and the allegations should be determined on the merits. In addition, a motion to strike will usually not be granted unless there is a showing of prejudice to the moving party.Estate of Jephson, 81 T.C. at 1001 (internal quotation marks and citations omitted).
The First Amendment to Petition lodged contains factual allegations regarding Ms. Kelley's request for innocent spouse relief. Mr. Gomez-Reyes has not shown that the matters raised in the First Amendment to Petition have no bearing on the issues raised in the notice of deficiency. The issue of whether Ms. Kelley is entitled to innocent spouse relief is a matter for possible review by this Court at a future trial session and a determination on the merits of the case. Mr. Gomez-Reyes has not shown with sufficient substantiation how he is or will be prejudiced by the Court granting Ms. Kelley's Motion for Leave. Since motions to strike are disfavored by Federal courts, we will deny Mr. Gomez-Reyes' Motion to Strike as he will have sufficient time to raise all defenses to Ms. Kelley's request for innocent spouse relief.
Upon due consideration of the parties' motions, and for cause, it is
ORDERED that the Ms. Kelley's Motion for Leave to File First Amendment to Petition, filed January 26, 2024, at Doc. 37, is granted. It is further
ORDERED that the Clerk of Court shall file Ms. Kelley's First Amendment to Answer, lodged January 26, 2024, at Doc. 38, as of the date of this order. It is further
ORDERED that Mr. Reyes' Motion to Strike, filed February 20, 2024, at Doc. 43, is denied. It is further
ORDERED that, on or before April 1, 2024, the Commissioner shall file an Answer to the First Amendment to Petition.