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litigation." Meier v. Commissioner, 91 T.C. 273, 282 (1988).
Issue preclusion, or collateral estoppel, is defined in 1
Restatement, Judgments 2d, section 27 (1982), as follows: "When
an issue of fact or law is actually litigated and determined by a
valid and final judgment, and the determination is essential to
the judgment, the determination is conclusive in a subsequent
action between the parties, whether on the same or a different
claim." Collateral estoppel may be applied in civil trials to
issues previously determined in a criminal conviction. Appley v.
West, 832 F.2d 1021, 1026 (7th Cir. 1987); Otherson v. Department
of Justice, 711 F.2d 267, 271 (D.C. Cir. 1983); Amos v.
Commissioner, 43 T.C. 50 (1964), affd. 360 F.2d 358 (4th Cir.
1965).
In Montana v. United States, 440 U.S. 147, 155 (1979), the
Supreme Court established a three-prong test for applying
collateral estoppel: First, whether the issues presented in the
subsequent litigation are in substance the same as those issues
presented in the first case; second, whether controlling facts or
legal principles have changed significantly since the first
judgment; and third, whether other special circumstances warrant
an exception to the normal rules of preclusion. In Peck v.
Commissioner, 90 T.C. 162, 166 (1988), affd. 904 F.2d 525 (9th
Cir. 1990), the Court stated that the "three-pronged rubric
provided by the Supreme Court in the Montana case embodies a
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