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estoppel precludes relitigation of any issue of fact or law that
was actually litigated and necessarily determined by a valid and
final judgment. Montana v. United States, 440 U.S. 147, 153
(1979); Brotman v. Commissioner, 105 T.C. 141, 147 (1995). In
addition, the issue must also have been necessary to the outcome
of the first action, see United States v. Mendoza, 464 U.S. 154,
158 (1984); Parklane Hosiery Co. v. Shore, 439 U.S. 322, 326 n.5
(1979); Niedringhaus v. Commissioner, 99 T.C. 202, 213 (1992),
and it cannot be relitigated in a suit between the parties or
their privies. Blanton v. Commissioner, supra at 495; Peck v.
Commissioner, 90 T.C. 162, 166 (1988), affd. 904 F.2d 525 (9th
Cir. 1990). Collateral estoppel
[precludes] parties from contesting matters that they
have had a full and fair opportunity to litigate [and]
protects their adversaries from the expense and
vexation attending multiple lawsuits, conserves
judicial resources, and fosters reliance on judicial
action by minimizing the possibility of inconsistent
decisions.
Montana v. United States, 440 U.S. at 153-154; Spear v.
Commissioner, 91 T.C. 984, 990 (1988).
It is well established that petitioner's conviction of
criminal tax evasion under section 7201 for 1985 collaterally
estops him from denying that some part of the deficiency in his
income tax for that year was due to fraud for purposes of section
6653(b). The elements of criminal tax evasion under section 7201
are virtually identical to the elements of civil tax fraud under
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