- 17 - 2. Points Not at Issue in the Prior Litigation “Collateral estoppel applies only to an issue that was actually litigated and determined in a prior action, not to an issue that might have been litigated.” Anderson, Clayton & Co. v. United States, 562 F.2d 972, 992 (5th Cir. 1977); see also Commissioner v. Sunnen, 333 U.S. 591, 597-598 (1948). As put by the Supreme Court in Commissioner v. Sunnen, supra at 598: “Since the cause of action involved in the second proceeding is not swallowed by the judgment in the prior suit, the parties are free to litigate points which were not at issue in the first proceeding, even though such points might have tendered and decided at that time.” Moreover, it is well settled that each taxable year is the origin of a new liability and of a separate cause of action. Id.; see also Estate of Hunt v. United States, 309 F.2d 146, 148 (5th Cir. 1962). In Cloud v. Commissioner, T.C. Memo. 1976-27, we held that the taxpayers were not collaterally estopped from challenging the Commissioner’s disallowance of their deductions of certain expenses under a theory different from the losing theory they had advanced in litigation concerning the same types of expenses for prior years. Petitioner’s assignments of error to respondent’s failure to allow it offsetting deductions or adjustments to gross income from sales do raise issues that were neither litigated nor resolved in the prior litigation. Although petitioner did raisePage: Previous 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 NextLast modified: November 10, 2007