George S. and Frela D. Beck - Page 4

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          affg. Cross v. Commissioner, 83 T.C. 561 (1984); Karmun v.                  
          Commissioner, 749 F.2d 567 (9th Cir. 1984), affg. 82 T.C. 201               
          (1984); Jourdain v. Commissioner, 71 T.C. 980 (1979).                       
          Petitioners urge us to reconsider all established case law on               
          this point and find it in error.  We decline to do so.                      
               B.  Cherokee Treaty of 1866                                            
               Petitioners alternatively argue that their income is                   
          specifically excluded by the 1866 Treaty.  As noted above, Native           
          American Indians are subject to Federal income taxation unless an           
          exemption can be found in a Federal statute or treaty.  See                 
          Squire v. Capoeman, supra.  Petitioners argue that the 1866                 
          Treaty confers such an exemption and specifically point to the              
          language contained in Article 10 of the 1866 Treaty as evidence             
          of this.                                                                    
               Respondent argues that petitioners should be collaterally              
          estopped from raising this issue because this issue has already             
          been considered and decided by this Court in Beck v.                        
          Commissioner, T.C. Memo. 1994-122 (Beck I), affd. without                   
          published opinion 64 F.3d 655 (4th Cir. 1995).  The following               
          conditions must be met for collateral estoppel to apply:                    
                    (1) The issue in the second suit must be identical                
               in all respects with the one decided in the first suit.                
                    (2) There must be a final judgment rendered by a                  
               court of competent jurisdiction.                                       
                    (3) Collateral estoppel may be invoked against                    
               parties and their privies to the prior judgment.                       






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