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issues are in controversy. Espinoza v. Commissioner, 78 T.C.
412, 415-416 (1982); Shiosaki v. Commissioner, 61 T.C. 861
(1974). No factual issues exist with regard to the question of
whether collateral estoppel applies in this case.
Petitioners argue that the principles of collateral estoppel
and/or res judicata apply to preclude respondent from determining
deficiencies that would cause the tax liabilities to exceed those
claimed by respondent and approved in connection with the
confirmation of petitioners’ plan for reorganization.
Petitioners contend that the filing of a proof of claim in
conjunction with the bankruptcy court’s confirmation of the plan
precludes respondent from determining additional income tax
deficiencies for the same taxable years.
The judicially created doctrines of collateral estoppel and
res judicata are intended to protect litigants from the burden of
relitigating an identical issue and to promote judicial economy
by preventing unnecessary or redundant litigation. The general
principle of res judicata is that once 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
bound as to each matter that sustained or defeated the claim, and
as to any other matter that could have been offered for that
purpose. Commissioner v. Sunnen, 333 U.S. 591, 597 (1948). The
traditional elements of res judicata are: Identity of the
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