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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
parties 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.” Cromwell v. County of
Sac, 94 U.S. 351, 352. The judgment puts an end to the
cause of action, which cannot again be brought into
litigation between the parties upon any ground
whatever, absent fraud or some other factor
invalidating the judgment. * * *
The Supreme Court also addressed application of the foregoing
principles in the particular context of tax litigation:
These same concepts are applicable in the federal
income tax field. Income taxes are levied on an annual
basis. Each year is the origin of a new liability and
of a separate cause of action. Thus if a claim of
liability or non-liability relating to a particular tax
year is litigated, a judgment on the merits is res
judicata as to any subsequent proceeding involving the
same claim and the same tax year. * * * [Id. at 598.]
The Tax Court and other courts have since interpreted the
Supreme Court’s directives specifically as they pertain to
decisions of this Court. We, for instance, have stated: “As a
general rule, * * * where the Tax Court has entered a decision
for a taxable year, both the taxpayer and the Commissioner (with
certain exceptions) are barred from reopening that year.”
Hemmings v. Commissioner, 104 T.C. 221, 233 (1995). Likewise,
“the Tax Court’s jurisdiction, once it attaches, extends to the
entire subject of the correct tax for the particular year.”
Erickson v. United States, 159 Ct. Cl. 202, 309 F.2d 760, 767
(1962).
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