Alec Jeffrey Megibow - Page 20

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          conduct by respondent that could reasonably be interpreted as               
          false statements or misleading silence with respect to                      
          petitioner’s entitlement to his claimed deductions.  On the                 
          contrary, the course of events beginning in the audit and                   
          ultimately reflected in the reasons for disallowance expressed in           
          the notice of deficiency emphasized the need for substantiation.            
               Collateral estoppel exists for “the dual purpose of                    
          protecting litigants from the burden of relitigating an identical           
          issue and of promoting judicial economy by preventing unnecessary           
          or redundant litigation.”  Meier v. Commissioner, 91 T.C. 273,              
          282 (1988); see also Montana v. United States, 440 U.S. 147, 153-           
          154 (1979); Parklane Hosiery Co. v. Shore, 439 U.S. 322, 326                
          (1979).  In general, the doctrine of collateral estoppel, also              
          referred to as issue preclusion, forecloses relitigation of                 
          issues actually litigated and necessarily decided in a prior                
          suit.  Parklane Hosiery Co. v. Shore, supra at 326 n.5; Meier v.            
          Commissioner, supra at 282; Peck v. Commissioner, 90 T.C. 162,              
          166 (1988), affd. 904 F.2d 525 (9th Cir. 1990).                             
               This Court, expanding upon three factors identified by the             
          Supreme Court in Montana v. United States, supra at 155, has set            
          forth five prerequisites necessary for the application in factual           
          contexts of collateral estoppel:                                            
               (1) The issue in the second suit must be identical in                  
               all respects with the one decided in the first suit.                   
               (2) There must be a final judgment rendered by a court                 
               of competent jurisdiction.                                             





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