Commissioner v. Sunnen

Last updated
Commissioner v. Sunnen
Seal of the United States Supreme Court.svg
Argued December 17, 1947
Decided April 5, 1948
Full case nameCommissioner of Internal Revenue v. Sunnen
Citations 333 U.S. 591 ( more )
68 S. Ct. 715; 92 L. Ed. 898
Prior historySunnen v. Commissioner, 161 F.2d 171 (8th Cir. 1947)
Holding
The general rule of res judicata applies to tax proceedings involving the same claim and the same tax year, while the doctrine of collateral estoppel, which is a narrower version of the res judicata rule, applies to tax proceedings involving similar or unlike claims and different tax years.
Court membership
Chief Justice
Fred M. Vinson
Associate Justices
Hugo Black  · Stanley F. Reed
Felix Frankfurter  · William O. Douglas
Frank Murphy  · Robert H. Jackson
Wiley B. Rutledge  · Harold H. Burton
Case opinions
Majority Murphy, joined by unanimous

Commissioner v. Sunnen, 333 U.S. 591 (1948), was a case decided by the Supreme Court of the United States in 1948 in which the Court outlined the scope of collateral estoppel or estoppel by judgment in determinations of federal tax liability. This was important because a single controversial circumstance may have a bearing on income tax liability for several years. Res judicata , as part of the doctrine of judicial finality, protects a taxpayer's tax liability for a given year once the taxpayer wins a judgment in court. The judgment is controlling not only controlling with regard to the issues litigated but also with any issues that could have been raised if they would have affected the determination of tax liability for the year. However, of course, a single controversial circumstance may have a bearing on income tax liability for several years, and if a judgment fixes liability for one of the years, res judiciary forecloses the reopening of only that year's liability. But the related doctrine of collateral estoppel prevents relitigation of issues that were in fact raised and decided in the earlier litigation, even when they arise in a new cause of action, such as a dispute as to liability for a later year.

Supreme Court of the United States Highest court in the United States

The Supreme Court of the United States is the highest court in the federal judiciary of the United States. Established pursuant to Article III of the U.S. Constitution in 1789, it has original jurisdiction over a small range of cases, such as suits between two or more states, and those involving ambassadors. It also has ultimate appellate jurisdiction over all federal court and state court cases that involve a point of federal constitutional or statutory law. The Court has the power of judicial review, the ability to invalidate a statute for violating a provision of the Constitution or an executive act for being unlawful. However, it may act only within the context of a case in an area of law over which it has jurisdiction. The Court may decide cases having political overtones, but it has ruled that it does not have power to decide nonjusticiable political questions. Each year it agrees to hear about 100–150 of the more than 7,000 cases that it is asked to review.

Collateral estoppel (CE), known in modern terminology as issue preclusion, is a common law estoppel doctrine that prevents a person from relitigating an issue. One summary is that, "once a court has decided an issue of fact or law necessary to its judgment, that decision ... preclude[s] relitigation of the issue in a suit on a different cause of action involving a party to the first case". The rationale behind issue preclusion is the prevention of legal harassment and the prevention of overuse or abuse of judicial resources.

Income tax in the United States

Income taxes in the United States are imposed by the federal, most state, and many local governments. The income taxes are determined by applying a tax rate, which may increase as income increases, to taxable income, which is the total income less allowable deductions. Income is broadly defined. Individuals and corporations are directly taxable, and estates and trusts may be taxable on undistributed income. Partnerships are not taxed, but their partners are taxed on their shares of partnership income. Residents and citizens are taxed on worldwide income, while nonresidents are taxed only on income within the jurisdiction. Several types of credits reduce tax, and some types of credits may exceed tax before credits. An alternative tax applies at the federal and some state levels.

Contents

However, the Supreme Court said that collateral estoppel in determinations of tax liability "must be confined to situations where the matter raised in the second suit is identical in all respects with that decided in the first proceeding and where the controlling facts and applicable legal rules remain unchanged." [1]

See also

Related Research Articles

Estoppel judicial device in common law legal systems whereby a court may prevent a person from making assertions or from going back on their word

Estoppel is a judicial device in common law legal systems whereby a court may prevent, or "estop" a person from making assertions or from going back on his or her word; the person being sanctioned is "estopped". Estoppel may prevent someone from bringing a particular claim, particularly if a promise unsupported by consideration is being relied on by the other party. Legal doctrines of estoppel are based in both common law and equity.

Res judicata (RJ) or res iudicata, also known as claim preclusion, is the Latin term for "a matter [already] judged", and refers to either of two concepts: in both civil law and common law legal systems, a case in which there has been a final judgment and is no longer subject to appeal; and the legal doctrine meant to bar continued litigation of a case on same issues between the same parties. In this latter usage, the term is synonymous with "issue preclusion".

England v. Louisiana State Board of Medical Examiners, 375 U.S. 411 (1964), was a United States Supreme Court decision that refined the procedures for U.S. federal courts to abstain from deciding issues of state law, pursuant to the doctrine set forth in Railroad Commission v. Pullman Co., 312 U.S. 496 (1941).

Gregory v. Helvering, 293 U.S. 465 (1935), was a landmark decision by the United States Supreme Court concerned with U.S. income tax law. The case is cited as part of the basis for two legal doctrines: the business purpose doctrine and the doctrine of substance over form. The business purpose doctrine is essentially that if a transaction has no substantial business purpose other than the avoidance or reduction of Federal tax, the tax law will not regard the transaction. The doctrine of substance over form is essentially that for Federal tax purposes, a taxpayer is bound by the economic substance of a transaction if the economic substance varies from its legal form.

Old Colony Trust Co. v. Commissioner, 279 U.S. 716 (1929), was an income tax case before the Supreme Court of the United States.

For federal income tax purposes, the doctrine of constructive receipt is used to determine when a cash-basis taxpayer has received gross income. A taxpayer is subject to tax in the current year if he or she has unfettered control in determining when items of income will or should be paid. Unlike actual receipt, constructive receipt does not require physical possession of the item of income in question.

The doctrine of direct estoppel prevents a party to a litigation from relitigating an issue that was decided against that party in that litigation, under certain circumstances. Specifically, direct estoppel applies where the issue was decided as part of a larger claim which was finally decided, and stops the issue from being redecided in another claim of the same lawsuit. Contrast collateral estoppel, which stops a claim from being redecided in another lawsuit.

Taxpayers in the United States may have tax consequences when debt is cancelled. This is commonly known as COD Income. According to the Internal Revenue Code, the discharge of indebtedness must be included in a taxpayer's gross income. There are exceptions to this rule, however, so a careful examination of one's COD income is important to determine any potential tax consequences.

United States v. Oppenheimer, 242 U.S. 85 (1916), was a landmark Supreme Court decision applying the common law concept of res judicata to criminal law cases.

<i>Zarin v. Commissioner</i>

Zarin v. Commissioner, 916 F.2d 110 is a United States Third Circuit Court of Appeals decision concerning the cancellation of debt and the tax consequences for the borrower for U.S. federal income tax purposes.

Arrowsmith v. Commissioner, 344 U.S. 6 (1952), is a United States Supreme Court case regarding taxation. The case involves taxpayers who liquidated a corporation in 1937. The taxpayers (properly) reported the income from the liquidation as long-term capital gains, thus obtaining a preferential tax rate. Subsequent to the liquidation in 1944, the taxpayers were required to pay a judgment arising from the affairs of the liquidated corporation. The taxpayers classified this payment as an ordinary business loss, which would allow them to take a greater deduction for the loss than would be permitted for a capital loss.

Commissioner v. Banks, 543 U.S. 426 (2005), together with Commissioner v. Banaitis, was a case decided before the Supreme Court of the United States, dealing with the issue of whether the portion of a money judgment or settlement paid to a taxpayer's attorney under a contingent-fee agreement is income to the taxpayer for federal income tax purposes. The Supreme Court held when a taxpayer's recovery constitutes income, the taxpayer's income includes the portion of the recovery paid to the attorney as a contingent fee. Employment cases are an exception to this Supreme Court ruling because of the Civil Rights Tax Relief in the American Jobs Creation Act of 2004. The Civil Rights Tax Relief amended Internal Revenue Code § 62(a) to permit taxpayers to subtract attorney’s fees from gross income in arriving at adjusted gross income.

Williamson County Regional Planning Commission v. Hamilton Bank of Johnson City, 473 U.S. 172 (1985), was a U.S. Supreme Court case that limited access to federal court for plaintiffs alleging uncompensated takings of private property under the Fifth Amendment.

Privity is the legal term for a close, mutual, or successive relationship to the same right of property or the power to enforce a promise or warranty. It is an important concept in contract law.

This collection of lists of law topics collects the names of topics related to law. Everything related to law, even quite remotely, should be included on the alphabetical list, and on the appropriate topic lists. All links on topical lists should also appear in the main alphabetical listing. The process of creating lists is ongoing – these lists are neither complete nor up-to-date – if you see an article that should be listed but is not, please update the lists accordingly. You may also want to include Wikiproject Law talk page banners on the relevant pages.

Chick Kam Choo v. Exxon Corp., 486 U.S. 140 (1988), was a United States Supreme Court case in which the Court held that a federal court's dismissal of a civil action on the ground that it should be heard in a foreign court, under the doctrine of forum non conveniens, does not preclude the plaintiff from filing the same action in a state court that applies different forum non conveniens rules.

<i>Johnson v Gore Wood & Co</i>

Johnson v Gore Wood & Co[2000] UKHL 65 is a leading UK company law decision of the House of Lords concerning (1) abuse of process relating to litigating issues which have already been determined in prior litigation or by way of settlement, (2) estoppel by convention, and (3) reflective loss of a shareholder with respect to damage which was done to the company in which he holds shares.

Blonder-Tongue Labs., Inc. v. University of Ill. Foundation, 402 U.S. 313 (1971), is a 1971 decision of the United States Supreme Court holding that a final judgment in an infringement suit against a first defendant that a patent is invalid bars the patentee from relitigating the same patent against other defendants. In so ruling, the Supreme Court overruled its 1936 decision in Triplett v. Lowell, which had required mutuality of estoppel to bar such preclusion, and held that the better view was to prevent relitigating if the plaintiff had had a full and fair opportunity to litigate the issue in question.

References

  1. ↑ Commissioner v. Sunnen, 333 U.S. 591, 599-600 (1948).
<i>United States Reports</i> official record of the rulings, orders, case tables, and other proceedings of the Supreme Court of the United States

The United States Reports are the official record of the rulings, orders, case tables, in alphabetical order both by the name of the petitioner and by the name of the respondent, and other proceedings of the Supreme Court of the United States. United States Reports, once printed and bound, are the final version of court opinions and cannot be changed. Opinions of the court in each case are prepended with a headnote prepared by the Reporter of Decisions, and any concurring or dissenting opinions are published sequentially. The Court's Publication Office oversees the binding and publication of the volumes of United States Reports, although the actual printing, binding, and publication are performed by private firms under contract with the United States Government Publishing Office.

This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.