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Bankruptcy Court which issued the order in petitioner’s
bankruptcy case is a court of competent jurisdiction.
The Bankruptcy Court’s order also constitutes a final
judgment on the merits. After conducting a hearing on the
merits, the Bankruptcy Court allowed respondent’s claim in a
final order which petitioner did not appeal. On these facts, we
conclude that the Bankruptcy Court’s order constitutes a final
judgment on the merits. See Turshen v. Chapman, 823 F.2d 836,
839-840 (4th Cir. 1987); Florida Peach Corp. v. Commissioner, 90
T.C. at 682-684; Holywell Corp. v. United States, 82 AFTR 2d 98-
6313, 98-2 USTC par. 50,734 (W.D. Va. 1998), affd. without
published opinion 229 F.3d 1142 (4th Cir. 2000). Accordingly,
the third requirement for res judicata is satisfied. As noted
above, the presence of fraud or some other factor which
invalidates the judgment in the first action will prevent the
application of res judicata even though the requirements therefor
have otherwise been satisfied. Petitioner contends that (1)
Wilkinson “set out on a deliberate course of misinformation and
deceit” to entice petitioner into permitting the Bankruptcy Court
to determine his tax liability for 1994, and (2) Wilkinson’s
alleged misrepresentations warrant an exception to the doctrine
of res judicata. Petitioner contends that Wilkinson represented
that (1) even if the Bankruptcy Court allowed respondent’s claim
for 1994, then petitioner’s 1994 tax liability would be
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