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stamped them received. Thus, respondent timely issued the notice
of deficiency to petitioner for tax years 1987-90 and 1992-95.3
B. Whether Petitioner May Carry Forward Net Operating Losses
From 1981-86 to the Years in Issue
1. Contentions of the Parties
Petitioner contends that his deductions for 1981-86 exceeded
his income and thus generated net operating losses, and that he
may carry forward those losses to the years in issue.
Respondent contends that res judicata bars petitioner from
contending that his deductions exceeded his income in 1981-86
because we decided his tax liability for 1981-86 in a prior case.
Petitioner contends that res judicata does not apply because,
according to petitioner, section 6214(b) and several cases he
cites allow him to calculate the proper amount of tax for closed
years. We agree with respondent for reasons stated next.
2. Effect of Allnutt I on Petitioner’s Attempt To Litigate
His Deductions for 1981-86 in This Case
Under the doctrine of res judicata, when a court of
competent jurisdiction has entered a judgment on the merits of a
cause of action, the parties to the suit and their privies are
3 In support of respondent’s contention that the notice of
deficiency was timely issued, respondent moved to reopen the
record after the trial to offer into evidence (1) returns that
respondent contends are petitioner’s photocopied returns with
original signatures for 1981-86, and (2) the envelope that
respondent contends petitioner used to mail those returns to
respondent’s Philadelphia Service Center. In light of our
conclusion that respondent timely issued the notice of
deficiency, we will deny respondent’s motion as moot.
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