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does not apply since they never maintained the position that the
merged amount was a contribution, their position was not accepted
by the Court since respondent conceded it, and references in
Fazi I to the 1986 tax year are just dicta. For the reasons
explained below, we believe that petitioners have the better
argument.
The Tax Court unequivocally accepted the doctrine of
judicial estoppel in Huddleston v. Commissioner, 100 T.C. 17, 28-
29 (1993):
We hold that the doctrine of judicial estoppel is
available in the Tax Court to be used in appropriate
cases, such as the one before us, to prevent parties
from taking positions that are inconsistent with those
previously asserted by the parties and accepted by
courts and that would result in inappropriate and
prejudicial consequences to the courts.
We used judicial estoppel in Huddleston to prevent the petitioner
in that case from denying that he had fiduciary authority to act
on behalf of a decedent's estate. Judicial estoppel may apply to
issues of law as well as factual issues: "In certain
circumstances a party may properly be precluded as a matter of
law from adopting a legal position in conflict with one earlier
taken in the same or related litigation." Allen v. Zurich Ins.
Co., supra at 1166; see In re Cassidy, supra at 641; Reynolds v.
Commissioner, 861 F.2d 469 (6th Cir. 1988). Judicial estoppel
must be used with caution: "Judicial estoppel is applied with
caution to avoid impinging on the truth-seeking function of the
court because the doctrine precludes a contradictory position
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