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the Ninth Circuit, to which this case is appealable, has
identified a three-step approach for determining the application
of collateral estoppel:
(1) An identification of the issues in the two actions
for the purposes of determining whether the issues are
sufficiently similar and sufficiently material in both
actions to justify invoking the doctrine; (2) an
examination of the record of the prior case to decide
whether the issue was “litigated” in the first case;
and (3) an examination of the record of the prior
proceeding to ascertain whether the issue was
necessarily decided in the first case. [United States
v. McLaurin, 57 F.3d 823, 826 (9th Cir. 1995); emphasis
omitted.]
It is well established that a subsequent guilty plea may be used
to establish issue preclusion in a subsequent civil suit where an
element of the crime to which the defendant pled guilty is at
issue in the second suit. See, e.g., United States v. $31,697.59
Cash, 665 F.2d 903 (9th Cir. 1982).
Because the elements of criminal tax evasion and civil tax
fraud are identical, petitioner’s prior conviction under section
7201 conclusively establishes the elements necessary for finding
fraud under section 6663. See Marretta v. Commissioner, T.C.
Memo. 2004-128, affd. 168 Fed. Appx. 528 (3d Cir. 2006); Frey v.
Commissioner, T.C. Memo. 1998-226; see also Brooks v.
Commissioner, 82 T.C. 413, 431 (1984) (holding that a section
7201 conviction collaterally estops a taxpayer from denying fraud
for purposes of section 6653(b), the predecessor of section
6663), affd. without published opinion 772 F.2d 910 (9th Cir.
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