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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 raise
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