M.J. Wood Associates, Inc. - Page 8

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            civil tax liabilities or make ultimate findings of fact upon                                
            which estoppel could be grounded.                                                           
                  The doctrine of res judicata is founded in the public policy                          
            that litigation must end and that the result should bind those                              
            who have contested the issue.  Shaheen v. Commissioner, 62 T.C.                             
            359, 363 (1974).  Generally, res judicata applies to repetitious                            
            suits involving the same cause of action.  Commissioner v.                                  
            Sunnen, 333 U.S. 591, 597 (1948).  The rule of res judicata                                 
                  that when a court of competent jurisdiction has entered                               
                  a final judgment on the merits of a cause of action,                                  
                  the parties to the suit and their privies are                                         
                  thereafter bound “not only as to every matter which was                               
                  offered and received to sustain or defeat the claim or                                
                  demand, but as to any other admissible matter which                                   
                  might have been offered for that purpose.”  * * *  [Id.                               
                  (quoting Cromwell v. County of Sac, 94 U.S. 351, 352                                  
            The doctrine of res judicata applies only to issues determined by                           
            a court of competent jurisdiction.  Montana v. United States, 440                           
            U.S. 147, 153 (1979).  Therefore, if the District Court lacked                              
            jurisdiction to or did not adjudicate petitioners' civil tax                                
            liabilities for the years at issue, the principles of res                                   
            judicata do not apply.                                                                      
                  The doctrine of collateral estoppel, or issue preclusion,                             
            provides that once an issue of fact or law is “actually and                                 
            necessarily determined by a court of competent jurisdiction, that                           

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