- 16 -
supra at 153-154; Meier v. Commissioner, 91 T.C. 273, 282-284
(1988).
Collateral estoppel applies when six conditions are met.
First, the issue in the later case must be identical in all
respects to the issue decided in the prior case. Commissioner v.
Sunnen, supra at 599-600; Peck v. Commissioner, 90 T.C. 162,
166-167 (1988), affd. 904 F.2d 525 (9th Cir. 1990). Second, a
final judgment must have been rendered in the prior case by a
court of competent jurisdiction. Peck v. Commissioner, supra at
166; Gammill v. Commissioner, 62 T.C. 607, 613 (1974). Third,
collateral estoppel must be asserted in the later case against a
party to the prior case or against a privy to that party. Peck
v. Commissioner, supra at 166-167; Gammill v. Commissioner, supra
at 614-615; see also Parklane Hosiery Co. v. Shore, supra
(mutuality of parties is not necessary for collateral estoppel).
Fourth, the issue in the later case must be one that the parties
to the prior case actually litigated and that was essential to
the prior decision. Commissioner v. Sunnen, supra at 598, 601;
Peck v. Commissioner, supra at 166-167. Fifth, the controlling
facts and legal principles must remain unchanged from the prior
litigation. Commissioner v. Sunnen, supra at 599-600; Peck v.
Commissioner, supra at 166-167. Sixth, no special circumstances
exist that would warrant the trial court in the later case to
exercise its discretion to find an exception to the normal rules
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