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2. Elements of Collateral Estoppel
a. Identity of Matters at Issue
The first element for collateral estoppel is met because
there are identical matters at issue in the bankruptcy trial and
in the instant case, such as whether, and if so, how, petitioner
diverted Resyn income to Polymer and Chemical Traders from 1963
to 1970. The Government had to prove fraud by clear and
convincing evidence in the bankruptcy case. To prove fraud,
the Government proved that Leo Levitt created two sham entities,
Chemical Traders and Polymer, to conceal Resyn's income. In re
Resyn Corp., 81-2 USTC par. 9808 at 88,685-88,686. The accounts,
transactions, and entities in the bankruptcy case are the same as
those in the instant case. The instant case also involves the
issue whether petitioners benefited from Resyn's unreported
income. However, the fact that the instant case has additional
matters at issue does not bar collateral estoppel from applying
to matters at issue which are the same in both cases. Bertoli v.
Commissioner, 103 T.C. 501, 508 (1994).
Petitioner points out that the bankruptcy court did not
decide whether petitioner committed civil tax fraud. The fact
that the bankruptcy court did not decide whether petitioner was
personally liable for additions to tax under section 6653(b) does
not help petitioner. The bankruptcy court found that petitioner
used Polymer and Chemical Traders to divert Resyn funds to
himself. The bankruptcy court found that petitioner withdrew
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