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the same account in which the 1991 interest payments were
deposited. Indeed, the $25,000 Aldergrove payment was credited
to the Aldergrove account on the same day as the Yakima interest
payments were credited to that account. Thus, petitioner's
control over Aldergrove partnership matters on December 26, 1991,
and his benefit from and control over funds in the Aldergrove
account on December 26, 1991 (together, the Aldergrove issue), is
an issue that was decided in Monahan I and is identical to a
factual issue relevant to respondent's determination of a
deficiency in this case.5
In addition, the Aldergrove issue was actually litigated in
Monahan I, and resolution of that issue was essential to the
decision in Monahan I. Petitioners do not dispute satisfaction
of that condition of the Peck requirements. Also, petitioners do
not claim that the applicable legal rules have changed; however,
they assert that issue preclusion does not apply because the
5 Although respondent seeks to preclude petitioners from
relitigating petitioner's control over Aldergrove partnership
matters in 1991 and his benefit from and control over funds in
the Aldergrove account in 1991, we believe that petitioner's
control over Aldergrove partnership matters on Dec. 26, 1991, and
his benefit from and control over funds in the Aldergrove account
on Dec. 26, 1991, are the only facts that are necessarily
established by this Court's finding in Monahan I that the $25,000
Aldergrove payment lacked economic substance. That is not to say
that this Court in Monahan I found that petitioner's relationship
with Aldergrove was any different on dates other than Dec. 26,
1991. See infra secs. II.C.4.d., e., and f.
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