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G. Conclusions39
DF #1, SGE 82-1, DGE 84-3, SGE 84-5, DGE 86-2, TBS 89-1, and
TBS 90-1 claimed to have acquired large numbers of breeding
cattle which did not exist. In addition, the annual herd recap
sheets and other records petitioners offered were not reliable
and contemporaneous documents. Each partnership’s stated
purchase price for its breeding cattle did not reasonably
39On brief, petitioners assert that this Court’s prior
decision in Bales v. Commissioner, T.C. Memo. 1989-568,
collaterally estops respondent from relitigating a number of
issues concerning the transactions in the instant cases.
However, petitioners failed to raise collateral estoppel as a
defense in their pleadings. The Court thus does not consider
petitioners’ collateral estoppel argument to be properly before
it. In any event, collateral estoppel would not apply in the
instant cases. The Bales decision involved several cattle-
breeding partnerships organized by the Hoyt family that had
entered into earlier transactions to acquire breeding cattle.
However, the years in issue in Bales generally were 1977, 1978,
and 1979. The instant cases, in contrast, involve partnerships
(which other than DF #1 were not involved in Bales) that well
after 1979 entered into transactions to acquire breeding cattle
from the Hoyt organization. The years in issue for the
partnerships in the instant cases are 1987 through 1992. Most
importantly, as the Court has determined, by the early 1980's the
Hoyt organization’s cattle management and record-keeping
practices had changed dramatically. The issues in the instant
cases thus are not identical to those decided in Bales and
collateral estoppel cannot apply, as different transactions and
substantially different controlling facts are presented. See
Peck v. Commissioner, 90 T.C. 162, 166-167 (1988), affd. 904 F.2d
525 (9th Cir. 1990); see also Commissioner v. Sunnen, 333 U.S.
591, 599-600 (1948) (“where two cases involve income taxes in
different taxable years, collateral estoppel must be used with
its limitations carefully in mind so as to avoid injustice. It
must be confined to situations where the matter raised in the
second suit is identical in all respects with that decided in the
first proceeding and where the controlling facts and applicable
legal rules remain unchanged.”).
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