I note STJ Peter J. (“HB”) Panuthos’ Order permitting IRS to amend its answer out of time in Ashref Zarmuh, Docket No. 7127-22, filed 3/23/26, as a cautionary tale.

IRS moves to amend out of time (that means late) to up the deficiency and the Section 6662(a) chop. Ashref’s trusty attorney objects this gives IRS “a second bite at the apple.” Order, at p. 2.

STJ HB Panuthos tells the story.

“The increased deficiency and penalty arise from gross receipts on Form Schedule C of an unsigned Form 1040 provided to respondent by petitioner’s counsel as part of informal discovery. The Form Schedule C was not part of the Form 1040 electronically filed by petitioner.” Order, at p.1.

Amendment of pleadings is granted absent prejudice.

“Petitioner has not demonstrated that he would be prejudiced by allowing respondent to assert an increased deficiency at this time. The case is not calendared for trial and no formal discovery is reflected on the record. Additionally, respondent will bear the burden of proof on this increased deficiency, pursuant to Tax Court Rule 142, thus further ameliorating any potential prejudice.” Order, at p. 2. (Citation omitted).  

Practitioner, make sure you have your client’s documents, all of them, in-hand, before you ever draft a petition. If time is short, file a generic petition and amend later. E-filing can be hazardous as well as helpful; make sure you have reviewed all documents as-filed before you file.

Edited to add, 3/23/26: Especially beware of some of these “free file e-file” software services, which don’t permit the filing of schedules.