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The Supreme Court described the doctrine of res judicata as
follows:
The general rule of res judicata applies to repetitious
suits involving the same cause of action. It rests
upon considerations of economy of judicial time and
public policy favoring the establishment of certainty
in legal relations. The rule provides that when a
court of competent jurisdiction has entered a final
judgment on the merits of a cause of action, the par-
ties to the suit and their privies are thereafter bound
“not only as to every matter which was offered and
received to sustain or defeat the claim or demand, but
as to any other admissible matter which might have been
offered for that purpose.” The judgment puts an end to
the cause of action, which cannot again be brought into
litigation between the parties upon any ground what-
ever, absent fraud or some other factor invalidating
the judgment. [Commissioner v. Sunnen, 333 U.S. 591,
597 (1948); citations omitted.]
In Gustafson v. Commissioner, supra, the Court held on facts
substantially the same as those involved in the instant case
“that the doctrine of res judicata bars an action for administra-
tive costs under section 7430(f)(2) to the extent that the
recovery of such costs could have been pursued in a prior defi-
ciency, liability, revocation, or partnership case.” Gustafson v.
Commissioner, supra at 93. We conclude that Gustafson is con-
trolling here. We hold that the doctrine of res judicata bars
petitioners from litigating in the instant case their claim for
administrative costs under section 7430(f)(2). We shall grant
respondent’s motion.
We have considered all of the contentions and arguments of
petitioners that are not discussed herein, and we find them to be
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Last modified: May 25, 2011