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sentencing guidelines, Mr. Jacobsen stipulated that he
understated his taxable income in 1987 and 1988 by $58,125 and
that the corresponding tax loss was approximately $16,275.
Petitioners’ stipulations in their criminal tax proceedings
do not collaterally estop them from challenging the specific
deficiency amount in this civil proceeding, because “the
determination of an exact liability was not essential to the
judgment, a prerequisite to the application of the doctrine of
collateral estoppel.” Moore v. United States, 360 F.2d 353, 356
(4th Cir. 1965) (internal quotation marks omitted); see Wapnick
v. Commissioner, T.C. Memo. 1997-133; Larson v. Commissioner,
T.C. Memo. 1993-188. Nonetheless, petitioners’ stipulations of
the amounts of understated income in their criminal tax
proceedings are strong evidence that Agent Fisher’s net worth
computations, and consequently respondent’s net worth
computations in the notices of deficiency derived directly
therefrom, are valid. See Livingston v. Commissioner, T.C. Memo.
2000-121. However, we find petitioners’ evidence in these civil
cases persuasive that some adjustments to income respondent
determined, in addition to those respondent conceded, must be
made. We conclude that the net worth computations and
nondeductible expenditures used in determining the deficiencies
in tax for the years at issue should be adjusted as follows.
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