- 6 -
Commissioner, 763 F.2d 1139, 1142-1143 (10th Cir. 1985), affg.
T.C. Memo. 1984-152; Webb v. Commissioner, 394 F.2d 366, 377 (5th
Cir. 1968), affg. T.C. Memo. 1966-81. Respondent has the burden
of proving fraud by clear and convincing evidence. Sec. 7454(a);
Rule 142(b); Stone v. Commissioner, 56 T.C. 213, 220 (1971).
As indicated, respondent contends that petitioner is
estopped from denying the existence of fraud for 1984 by virtue
of petitioner's criminal conviction under section 7201. We
agree.
Collateral estoppel serves to protect litigants from the
burden of relitigating an identical issue and promotes judicial
economy by preventing unnecessary and redundant litigation.
Meier v. Commissioner, 91 T.C. 273, 282 (1988). Under the
doctrine of collateral estoppel, a valid, final judgment in a
prior suit precludes, in a second cause of action, litigation of
issues actually litigated and necessary to the outcome of the
first action. Parklane Hosiery Co. v. Shore, 439 U.S. 322, 326
(1979); Niedringhaus v. Commissioner, 99 T.C. 202, 213 (1992);
Meier v. Commissioner, supra.
A criminal conviction based upon a charge of willful attempt
to evade tax in violation of section 7201 necessarily carries
with it the ultimate factual determination that part of the
underpayment for the particular taxable year was due to fraud as
encompassed in section 6653(b). Plunkett v. Commissioner, 465
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