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not entitled to a theft loss deduction for any of the years at
issue, the petitioners’ arguments concerning the remaining
elements of a theft loss are moot.
2. Application of Collateral and Judicial Estoppel
To further support their position, petitioners argue that
both collateral and judicial estoppel preclude respondent from
denying that Jay Hoyt’s conviction establishes a theft from the
partnerships and that the amount of the theft is equal to the
total amount contributed by the partners. Petitioners allege
that Jay Hoyt’s conviction establishes a theft from the
partnerships and that the respondent cannot deny what the
Government has already proven.
a. Collateral Estoppel
Petitioners attempt to utilize offensive collateral estoppel
against respondent. Procedurally, in order for a plaintiff to
assert offensive collateral estoppel against a defendant in a
current action, the current defendant must have unsuccessfully
litigated the issue in a previous action. See Kroh v.
Commissioner, 98 T.C. 383, 402 n.8 (1992)(citing Parklane Hosiery
Co. v. Shore, 439 U.S. 322, 326 n.4 (1979)). Here, petitioners
seek to apply the offensive form of collateral estoppel in a
situation where the Government was successful in the previous
action. Petitioners state that this is quite a rare situation,
but that no logical reason exists to preclude the application of
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