Affiliated Foods, Inc., A Corporation - Page 16




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               Rayonier, Inc., 627 F.2d 996, 1000 (9th Cir. 1980).                    
               This Court in Peck v. Commissioner, 90 T.C. 162,                       
               166-167 (1988), affd. 904 F.2d 525 (9th Cir. 1990), set                
               forth the following five conditions that must be                       
               satisfied prior to application of issue preclusion in                  
               the context of a factual dispute * * * :                               
                    “(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.  * * * ”                                                   
               C.  Discussion                                                         
                    1.  Petitioner’s Argument                                         
               Petitioner concedes that the first three conditions are                
          satisfied.  Petitioner argues that the fourth condition is not              
          satisfied since, by assigning error to respondent’s failure to              
          allow it offsetting deductions or adjustments to gross income               
          from sales--if we should decide in the first place that                     
          petitioner received anything on account of the vendors’ payments            
          to members of petitioner-delivered currency--petitioner has                 
          raised issues that were neither litigated nor resolved in the               
          prior litigation.  Petitioner argues that the fifth condition is            
          not satisfied since the controlling facts in this case are not              
          the same as in the prior case.                                              








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