Jean A. Stanko - Page 18

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          judicata does not apply since Stanko v. Commissioner, supra, was            
          decided by default.  We disagree.                                           
               A default judgment is a judgment on the merits for purposes            
          of res judicata.  Morris v. Jones, 329 U.S. 545, 550-551 (1947)             
          (“A judgment of a court having jurisdiction of the parties and of           
          the subject matter operates as res judicata, in the absence of              
          fraud or collusion, even if obtained upon a default”); Kapp v.              
          Naturelle, Inc., 611 F.2d 703, 707 (8th Cir. 1979); Moyer v.                
          Mathas, 458 F.2d 431, 434 (5th Cir. 1972); Shaheen v.                       
          Commissioner, 62 T.C. 359, 364 (1974).  Res judicata applies to             
          Tax Court cases resolved through default judgments.  Shaheen v.             
          Commissioner, supra.                                                        
               This meets the third requirement for res judicata to apply.            
          Thus, we hold that res judicata bars petitioner from disputing              
          that Stanko is liable as a transferee of assets of Stanko Packing           
          for its income tax deficiency and additions to tax as decided in            
          Stanko v. Commissioner, supra.                                              
               The parties have stipulated adjustments to Stanko Packing's            
          income and deductions for its tax year that ended on June 21,               
          1985.  We believe that, for purposes of determining petitioner's            
          liability as a transferee in this case, Stanko Packing's                    











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