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res judicata petitioners are precluded from questioning here the
validity of the notice of deficiency that were the subject of the
prior litigation.
The Supreme Court in Commissioner v. Sunnen, 333 U.S. 591,
597 (1948), summarized the judicial doctrine of res judicata,
also known as claim preclusion, as follows:
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, 24 L.Ed. 195. 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. * * *
As to the application of the doctrine in the context of tax
litigation the Court stated:
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.]
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).
It has also been held that “the Tax Court’s jurisdiction, once it
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