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Department of the Treasury”. There is an obvious “identity of
interests” where nine of respondent’s employees, as well as
respondent (at least initially), were defendants in petitioner’s
District Court case, and respondent is now the defendant in the
instant case. Accordingly, privity poses no barrier to the
application of collateral estoppel.
4. Issues Actually Litigated and Essential
The fourth factor is that the issues in question have been
actually litigated and essential to the result in the prior
proceeding. Peck v. Commissioner, supra at 167. The District
Court stated: “Lizcano has also alleged the sole motivation
underlying the audit of his tax returns was to retaliate against
his constitutionally protected right to complain of illegal and
discriminatory actions by other IRS employees.” The District
Court concluded that while petitioner had sufficiently alleged
violations of his constitutional rights by defendants in
initiating the audit, he failed to prove that any of the named
defendants initiated or were involved in the selection of his tax
return for examination. Instead, the District Court found that
the selection of his 1999 Federal income tax return for audit had
been done by computer.14 Petitioner again alleges that his 1999
14There has been no allegation nor fact alleged that the
computer’s selection was done in other than a neutral way based
on the IRS’s standard matching and/or Discriminatory Income
Function (DIF) software used to score tax returns for their
(continued...)
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Last modified: March 27, 2008