absence of a showing of fraud on the Court, or lack of jurisdiction, in respect of the 1994 decision, which elements are concededly not present herein. Petitioner asserts that, since it seeks no change in the amounts of the deficiencies for 1977 and 1978 set forth in the 1994 decision, it is not seeking to modify a final decision but only the underlying figures set forth in the 1994 computations for the limited purpose of determining interest due.

(2) Respondent also argues that the relief petitioner is requesting involves a change in the numbers set forth in the 1994 computations, including specific line entries and that such changes would require the Court to reopen the record to admit new facts, a procedure that constitutes a prohibited attempt to introduce a new matter in a Rule 155 proceeding.

(3) Respondent contends that, even if we find that we have jurisdiction, petitioner is bound by the 1994 computations which it signed and that any modification of those computations is accordingly unwarranted. In so doing, respondent denies that there was a mutual mistake by the parties based upon the omission from the 1994 computations of the 1979 ITC which had been included in the 1992 computations. Petitioner asserts that this omission constituted a mutual mistake and that therefore it should not be bound by those computations.

(4) Respondent asserts that, in any event, the 1994 computations reflected the correct ordering of the carrybacks by petitioner and that petitioner's use of the itc to reflect payment is not justified, as a matter of law, because the ITC amounts were made unavailable by the 1982 NOL and the 1979 FTC. Petitioner counters that the fact that the later events prevented the application of the ITC against its tax liability for deficiencies does not preclude its ability, for the purpose of computing interest due, to continue to treat them as payment for the periods when they were used, i.e., between the effective dates of the credits involved and the dates of occurrence of the later events.

We deal with each of these elements in turn.
Initially, we note that the existence of a final decision does

a not tie our hands in this case. We recognize that we may not modify a final decision absent a showing of fraud or lack of jurisdiction. Abatti v. Commissioner, 86 T.C. 1319, 1326 (1986), affd. 859 F.2d 115 (9th Cir. 1988). However, section 7481(c) specifically carves out an exception to the rule on the finality of our decisions. Indeed, a prerequisite for invoking section 7481(c) is that the decision be final. Aldrich v. Commissioner, T.C. Memo. 1993–290. Thus, as long as we do not change the substance of the final decision, we are free to act under section 7481(c).

Stauffacher v. Commissioner, supra, cited by respondent, is clearly distinguishable. In that case, the taxpayer sought a change in the amount of deficiencies, although the taxpayer was apparently requesting that this be done only for the purpose of computing interest. Petitioner herein is not seeking a change in the amounts of the deficiencies for any purpose. We do not think that the fact that the 1994 decision specifically incorporated the 1994 computations, see supra p. 3, requires a different conclusion. Under the circumstances herein, such action does not elevate the computations from a position of providing a basis for the decision to the position of an integral part of the decision itself.

Respondent also seeks refuge in the rule that petitioner may not raise a new issue in a Rule 155 proceeding. Cloes v. Commissioner, 79 T.C. 933 (1982). But even if the issue of the proper application of the 1979 ITC as it affects interest liability were never raised before, it is not a "new issue” within the meaning of Rule 155. Since in the instant case the proper application of the 1979 ITC only affects interest, we had no jurisdiction to decide the issue during the main deficiency proceeding. Pen Coal Corp. v. Commissioner, 107 T.C. 249, 255 (1996). Thus, petitioner cannot be accused of raising a “new” issue that it could not have brought up before.

Moreover, this is not a Rule 155 proceeding, and respondent's argument on this point reveals a misunderstanding of the nature of the relief petitioner is requesting and a misapprehension of the difference between Rules 155 and 261. The purpose of a computation under Rule 155 is to show "the correct amount of the deficiency, liability, or overpayment to be entered as the decision.” Rule 155(a). If there is disagreement between the parties, the Court will determine the correct computation, and argument on that point is “confined strictly to consideration of the correct computation of the deficiency, liability, or overpayment resulting from the findings and conclusions made by the Court”. Rule 155(c). Not only does Rule 155 not contemplate that a computation


thereunder should reflect interest amounts, but, contrary to respondent's arguments on brief, the Rule does not allow arguments as to any other issues beyond the issues litigated in respect of the ultimate bottom-line deficiency, liability, or overpayment for the years at issue.

Rule 261(d), on the other hand, specifically contemplates "bona fide factual [disputes]” which would have to be addressed by an evidentiary hearing. This Rule implies that this Court will, if necessary, accept new facts, specifically in the context of a final decision, for the purpose of redetermining interest. Additionally, respondent has never contested the existence of the amounts of ITC, nor has respondent disputed the accuracy of the amounts set forth in petitioner's motion. The record herein contains all the evidence needed to decide the ultimate issue before us. Thus, respondent's assertion of the need for new facts is unfounded.

As we view the situation in respect of the procedural elements involved herein, petitioner is simply seeking to flesh out the 1994 computations so as to provide the foundation for a proper calculation of its liability for interest without in any way changing its liabilities for the deficiencies. Although petitioner's efforts reflect changes in some of the numbers in the 1994 computations, those changes do no more than offset each other. This is clearly reflected in the appendix to this opinion, which shows that in each year petitioner first adds in the 1979 ITC credits and then subtracts an identical amount. In view of the foregoing, we are satisfied that neither the rule as to the finality of our decisions nor the principle that a new issue may not be raised in a Rule 155 proceeding precludes us from addressing the substance of petitioner's motion.

Respondent also objects to any change in the 1994 computations, on the grounds that the computations were based

a stipulation of settlement between petitioner and respondent, and petitioner cannot now seek to be relieved of its stipulation. According to respondent, petitioner cut a deal and is now stuck with it. According to petitioner, the amounts of ITC in discussion were included in the 1992 computations but, as a result of mutual inadvertence, then left out of the 1994 computations.13


13 We note that the Court of Appeals for the Seventh Circuit did not address any issue or otherwise take any action in respect of the application of carrybacks in the 1992 computations.

It is clear that we may reopen an otherwise valid settlement agreement based on the existence of mutual mistake. Callen v. Pennsylvania R. Co., 332 U.S. 625, 630 (1948); Dorchester Indus. Inc. v. Commissioner, 108 T.C. 320, 334 (1997). We may also relieve a party of a stipulation where justice requires. Cf. Rule 91(e); Adams v. Commissioner, 85 T.C. 359, 375 (1985); Shaw v. Commissioner, T.C. Memo. 1991372 n.3. On the other hand, unilateral mistake is generally not a ground for reforming a settlement or stipulation. Stamm Intl. Corp. v. Commissioner, 90 T.C. 315, 320 (1988); see Markin v. Commissioner, T.C. Memo. 1989–665. It is also clear that the mere fact that a decision which has become final is based on a stipulation does not bar the application of section 7481(c). In Stauffacher v. Commissioner, 97 T.C. 453 (1991), the underlying issues had been resolved on the basis of a stipulated decision. While the Court rejected the taxpayer's attempt to construct a different settlement, it did redetermine the amount of interest owed, as recalculated by respondent, which was lower than the amount which had been assessed and paid.

We must, therefore, determine whether the omission of the amounts of 1979 ITC from the 1994 computations was a result of unilateral or mutual mistake. In respondent's initial notice of objection to petitioner's motion, respondent conceded that the ITC amounts were inadvertently left out of the 1994 computations:

Respondent agrees that, on the basis of information now available, respondent would have agreed to the computations petitioner now advocates, had the matter been raised in 1994 when the computation on remand was being prepared.

In a supplemental notice of objection to petitioner's motion, and on brief, respondent recants this concession, because, "upon further consideration”, respondent contends that the 1994 computations "correctly reflect the application of payments and credits to the deficiencies determined therein.” Thus, respondent does not deny that a mistake was originally made, but rather contends that the mistake led to what respondent now believes is the correct result and therefore is not a mistake on respondent's part. As a consequence,


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respondent seeks to enforce the 1994 computations submitted on the ground that only a unilateral mistake was involved.

Stipulations are treated under general principles of contract law. Stamos v. Commissioner, 87 T.C. 1451, 1455 (1986). If a contract is based on a mutual mistake, a defense to reformation or rescission is not that the contract with the mistake is more beneficial to the defending party. Similarly, it is no defense to petitioner's motion for respondent to decide that the outcome of the case with the stipulation based on a mutual mistake is more favorable to respondent than the outcome petitioner proposes.

Respondent cannot claim prejudice by petitioner's proposed treatment of the interim interest, respondent having included the ITC amounts in question in the 1992 computations, Dorchester Indus. Inc. v. Commissioner, supra, and petitioner having raised the issue with respondent shortly after discovering the error. See 13 Williston, Contracts, sec. 1578, at 507 n.5 (3d ed. 1970).

Finally, as we discuss below, while it is uncontested that the 1994 computations correctly reflect payments so as to determine tax liability for the deficiencies, they do not correctly reflect payments so as to determine the proper interest liability. According to respondent, if a change of heart takes place, that is enough to eliminate the existence of a mutual mistake even though in point of fact the change of heart proves to be incorrect. Respondent is in effect saying that, even if petitioner's contention as to the substantive law is correct, respondent's changed position remains unassailable. We think respondent's position creates a catch-22 situation and is incongruous to say the least.

We conclude that, in the interest of justice, petitioner should be relieved from the effects of the stipulated 1994 computations for the narrow purpose of redetermining interest for the 1978 and 1977 tax years during the interim period at issue. Cf. Rule 91(e); Louisiana Land & Exploration Co. v. Commissioner, 90 T.C. 630, 648 (1988); Korangy v. Commissioner, 893 F.2d 69, 72 (4th Cir. 1990), affg. T.C. Memo. 1989–2 (applying Rule 91(e) to a settlement agreement).

In this context, we find it irrelevant whether the error as to the carryback of the 1979 ITC was due to the carelessness

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