Leo N. Levitt and Ruth G. Levitt - Page 38

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          adversaries from the expense and vexation of multiple lawsuits,             
          conserves judicial resources, and fosters reliance on judicial              
          action by minimizing the possibility of inconsistent decisions.             
          Montana v. United States, supra at 153-154; Meier v.                        
          Commissioner, 91 T.C. 273, 282-284 (1988).  Collateral estoppel             
          can apply in Federal tax cases.  Commissioner v. Sunnen, supra at           
               Collateral estoppel applies in the following circumstances:            
          First, the matter at issue in the second suit is identical with             
          the one decided in the first suit.  Id. at 599-600.  Second,                
          there is a final judgment rendered by a court of competent                  
          jurisdiction.  Peck v. Commissioner, 90 T.C. 162, 166 (1988),               
          affd. 904 F.2d 525 (9th Cir. 1990); Gammill v. Commissioner, 62             
          T.C. 607, 613 (1974).  Third, the parties to the second suit are            
          the same as the parties to the first suit or in privity with                
          them.  Peck v. Commissioner, supra at 166-167; Gammill v.                   
          Commissioner, supra at 614-615.  Fourth, the parties have                   
          actually litigated the matters at issue, and the resolution of              
          those matters was essential to the prior decision.  Commissioner            
          v. Sunnen, supra at 598, 601.  Fifth, the controlling facts and             
          legal principles remain unchanged.  Id. at 599-600.  Sixth, there           
          are no special circumstances that would warrant making exception            
          to the normal rules of preclusion.  Montana v. United States,               
          supra at 162; Meier v. Commissioner, supra at 291-292.                      

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