George A. and Marysue Coward - Page 6

            as their distributive share of the partnership's investment tax                              
            credit basis on their Federal income tax return filed for 1978.                              
            Petitioners claimed an investment tax credit of $16,520 for the                              
            year.  None of this amount was used to reduce petitioners' tax                               
            liability for the taxable year 1978.  Petitioners carried back                               
            the investment tax credit to taxable years 1975, 1976, and 1977,                             
            in the amounts of $4,847, $4,946, and $6,727, respectively.                                  
                  In the notice of deficiency, respondent determined that                                
            petitioners had not established that they were entitled to the                               
            claimed investment tax credit.  Respondent disallowed the credit                             
            and carrybacks.                                                                              
                  As an initial matter, on brief petitioners argue that our                              
            findings in Bales v. Commissioner, T.C. Memo. 1989-568, are                                  
            binding on the parties to this action under the theory of                                    
            collateral estoppel.  That case involved certain limited partners                            
            who invested in partnerships formed by Walter J. Hoyt III, to                                
            engage in the business of breeding cattle.                                                   
                  Collateral estoppel is an affirmative defense which must be                            
            specifically pleaded.  Rule 39.  Collateral estoppel precludes                               
            litigation by parties or their privies, in a later suit on a                                 
            different cause of action, of issues of fact and law actually                                
            litigated and necessarily decided by a court in reaching a prior                             
            judgment.  United States v. Mendoza, 464 U.S. 154, 158 (1984).                               
            "Collateral estoppel may apply to matters of fact, matters of                                

Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  Next

Last modified: May 25, 2011