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It is well settled that a judgment is conclusive in an
action only as to matters actually litigated and
determined in the prior action and that where a
decision of this Court constitutes only a pro forma
acceptance of an agreement between the parties to
settle their controversy for reasons undisclosed, there
has been no such determination as is required for the
application of the doctrine of collateral estoppel.
United States v. International Bldg. Co., 345 U.S. 503.
In the prior case no trial or argument was had and no
stipulations of facts or briefs were filed. Our
decision of no deficiency was entered pro forma upon
the basis of an agreement of the parties to settle the
case for reasons undisclosed. Accordingly, the doctrine
of collateral estoppel has no application here.
Petitioner also contends that it was unreasonable for
respondent to require adequate substantiation for the adjustments
in issue because (so petitioner alleges) such substantiation was
already in respondent’s files for petitioner’s 1998 taxable year.
However, petitioner’s argument ignores the fact that “each
taxable year stands on its own and must be separately
considered.” Pekar v. Commissioner, 113 T.C. 158, 166 (1999);
see Rinehart v. Commissioner, T.C. Memo. 2002-9; see also Auto.
Club of Mich. v. Commissioner, 353 U.S. 180, 183-184 (1957). In
other words, each taxable year stands on the facts existing in
that year, and, as experience teaches, the facts may change from
year to year.7
7 Petitioner cites Nguyen v. Commissioner, T.C. Memo. 2001-
41, for the proposition that the Commissioner is not
substantially justified when he fails to examine information
already in his possession. Petitioner’s reliance on the Nguyen
case is misplaced, however. In that case, the Commissioner had
obtained documentation for the year in issue from the taxpayer.
Having solicited that documentation, we held that it was
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