Thomas G. Wright and Estate of Rosemary K. Wright, Deceased, Thomas G. Wright, Personal Representative - Page 22

                                       - 22 -                                         
                    162, 166-167 (1988)(citations omitted), affd. 904                 
                    F.2d 525 (9th Cir. 1990).]                                        
               Petitioners fail to meet the prerequisites to invoke                   
          collateral estoppel.  Although the issue, the controlling facts,            
          and the parties are identical for each of the 1989, 1994, 1997,             
          1998 taxable years and for the years 1999 and 2000 in issue,                
          respondent’s decision not to make adjustments to previous years’            
          tax returns was not the subject of any litigation.  Thus, there             
          was no final judgment rendered by any court, much less a court of           
          competent jurisdiction.  Accordingly, collateral estoppel does              
          not apply in this case.                                                     
          V. Conclusion                                                               
               Petitioners are not entitled to exclude disability benefits            
          payments from their gross income in excess of the amount                    
          determined by STRS and respondent.  Petitioners did not establish           
          that the additional benefits they sought to exclude were                    
          attributable to Mr. Wright’s after-tax contributions or that                
          respondent was prohibited from making the adjustments to income             
          at issue in this case.                                                      
               To reflect the foregoing,                                              
                                                  Decision will be entered            
                                             for respondent.                          










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