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the doctrine of collateral estoppel only forecloses relitgation
of an issue previously litigated and decided in a prior suit.
Id. at 326 n.5; United States v. Intl. Bldg. Co., 345 U.S. 502,
505 (1953); Meier v. Commissioner, supra at 282. In Megibow v.
Commissioner, supra, this Court recently observed:
From a legal standpoint, income taxes are levied
on an annual basis, such that each year represents a
new liability and a separate cause of action.
Commissioner v. Sunnen, 333 U.S. 591, 598-600 (1948);
Fla. Peach Corp. v. Commissioner, 90 T.C. [678], 682.
Given this principle, collateral estoppel would not
operate to establish entitlement to deductions in one
year based merely on an allowance of similar deductions
in a different year or years. See Barmes v.
Commissioner, T.C. Memo. 2001-155 (rejecting attempts
to apply collateral estoppel to depreciation deductions
based on a prior litigated tax year), affd. 89 AFTR 2d
2002-2249, 2002-1 USTC par. 50,312 (7th Cir. 2002); see
also, Adolph Coors Co. v. Commissioner, 519 F.2d 1280,
1283 (10th Cir. 1975)(rejecting an attempt to apply
collateral estoppel even though the exact issue was
raised in a prior Tax Court proceeding but, because the
Commissioner abandoned the issue during the litigation,
no judicial determination or findings were made), affg.
60 T.C. 368 (1973).
In a factual context, for collateral estoppel to apply, the
following requirements are necessary:
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.
3. Collateral estoppel may be invoked against
parties and their privies to the prior judgment.
4. The parties must actually have litigated the
issues and the resolution of these issues must
have been essential to the prior decision.
5. The controlling facts and applicable legal
rules must remain unchanged from those in the
prior litigation. [Peck v. Commissioner, 90 T.C.
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