Opinion ID: 658130
Heading Depth: 2
Heading Rank: 3

Heading: The Application of Res Judicata to this Case

Text: 32 We now examine the merits of the government's argument that claim preclusion prohibited Mrs. Shanbaum from asserting the innocent spouse defense in this action. As we discussed above, claim preclusion is appropriate only if four conditions are satisfied: the parties must be identical; the judgment in the prior action must have been rendered by a court of competent jurisdiction; the prior action must have concluded with a final judgment on the merits; and the same claim or cause of action must be involved in both suits. We conclude that all of these conditions have been met. 33 First, the parties in this case and in the proceedings before the Tax Court are, obviously, identical. Mrs. Shanbaum was a named party and was represented by counsel in all of the Tax Court proceedings. Second, the Tax Court is a court of competent jurisdiction for the determination of a taxpayer's income tax and transferee liability. Third, Mrs. Shanbaum's Tax Court proceedings concluded with final judgments on the merits. Simply because the Tax Court decisions were reached by agreement does not mean that Mrs. Shanbaum's income tax and transferee liabilities were not resolved by final judgments on the merits for the purposes of res judicata. An agreed judgment is entitled to full res judicata effect. United States v. International Building Co., 345 U.S. 502, 505-06, 73 S.Ct. 807, 809, 97 L.Ed. 1182 (1953); Jones v. Texas Tech Univ., 656 F.2d 1137, 1144 (5th Cir.1981); Kaspar Wire Works, 575 F.2d at 538-39. Finally, the causes of action that formed the basis this suit and the proceedings in the Tax Court are identical. We have stated that one's total income tax liability for each taxable year constitutes a single, unified cause of action, regardless of the variety of contested issues and points that may bear on the final computation. Finley v. United States, 612 F.2d 166, 170 (5th Cir.1980). Thus, if a claim of liability or non-liability relating to a particular tax year is litigated, a judgment on the merits is res judicata as to any subsequent proceeding involving the same claim and the same tax year. Commissioner v. Sunnen, 333 U.S. 591, 598, 68 S.Ct. 715, 719, 92 L.Ed. 898 (1948). 34 Since all of the conditions of claim preclusion have been satisfied, that doctrine applies in this suit. Having once had the opportunity to assert defenses to her tax liability, res judicata barred Mrs. Shanbaum from asserting in the district court the innocent spouse defense to her tax liability. Id.; Smaczniak, 998 F.2d at 242.