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1. Agreed Judgment
Petitioners claim the agreed judgment is evidence that theft
occurred. As a result of the agreed judgment, SWAS was entitled
to recover from Mr. Kanz for what he admitted were embezzlement
losses. In Qualley v. Commissioner, supra, we held the
introduction of lower court cases on the issue of theft was not
sufficient proof of theft because the cases were settled.
Similarly, in this case, the agreed judgment was entered as a
result of a settlement between petitioners and Mr. Kanz and does
not prove theft actually occurred.12
2. Mr. Kanz’s Admissions
Petitioners argue Mr. Kanz’s admissions prove theft
occurred. Even though an admission was sufficient to prove theft
in Monteleone v. Commissioner, supra, the facts and circumstances
in this case are distinguishable. The circumstances of Mr.
Kanz’s admissions indicate he was not forthright. Mr. Kanz
settled SWAS v. Kanz in 1993. At about the same time, he and Mr.
Grothues executed the collateral agreement in which Mr. Grothues
agreed not to attempt collection in exchange for Mr. Kanz’s
assistance in resolving petitioners’ tax problems.13 Both Mr.
12Petitioners did not argue that collateral estoppel could
prohibit respondent from seeking another determination of the
litigated issue in this subsequent action.
13Even though the collateral agreement was not dated,
according to the stipulation of facts submitted by the parties,
(continued...)
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