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II. Restitution Ordered by the District Court
Petitioner appears to argue that the District Court’s
judgment in his prior criminal proceeding, which ordered him to
pay restitution, disposed of his tax liabilities for 1994, 1995,
1996, and 1997. This raises the issue of whether the doctrine of
collateral estoppel applies with respect to petitioner’s tax
liabilities for 1994, 1995, 1996, and 1997.
The purposes of applying the doctrine of collateral estoppel
(a.k.a. issue preclusion) are to prevent litigants from having to
relitigate identical issues and to promote judicial economy. See
Meier v. Commissioner, 91 T.C. 273, 283 (1988). Collateral
estoppel applies “once an issue is actually and necessarily
determined by a court of competent jurisdiction, [and] that
determination is conclusive in subsequent suits based on a
different cause of action involving a party to the prior
litigation.” Montana v. United States, 440 U.S. 147, 153 (1979).
Building on the Supreme Court’s decision, the Court of Appeals
for the Sixth Circuit has identified four conditions for
collateral estoppel to be enforced. Hickman v. Commissioner, 183
F.3d 535, 536 (6th Cir. 1999), affg. T.C. Memo. 1997-566. First,
the issue in the subsequent litigation must be identical to that
resolved in the prior litigation. Second, the issue must have
been actually litigated and judicially determined in the prior
action. Third, the issue in the prior litigation must have been
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