He directs our attention to the following cases that he contends are more persuasive and relevant. Plains Buying & Selling Association, 5 B.T.A. 1147(1927); M. R. Hoffman, 7 B.T.A. 303(1927); Robert T. Cunningham, 20 B.T.A. 428(1930); Comas, Inc., 23 T.C. 8(1954); Missouri Pacific Railroad Co., 30 B.T.A. 587(1934); Molly-‘es Doll-Outfitters, Inc., 38 B.T.A. 1(1938). The petitions were filed prior to the commencement of bankruptcy proceedings in all of these cases except the last case cited.
In In re Fotochrome, Inc., supra at 961, the court noted that "[i]n cases of concurrent jurisdiction the court which first reaches the case for trial may then proceed to a final decision without interruption and the doctrine of res adjudicata will apply to the result. Ohio Steel Foundry Co. v. United States, 38 F.2d 144, 149, 150 [69 Ct.Cl. 158] (Ct.Cl. 1930); Comas, Inc. [ v. Commissioner, 23 T.C. 8 (1954)] supra, 10-11." See also, Ellis v. Commissioner, 14 T.C. 484, 487 (1950); United States v. Leary, 228 F. Supp. 467 (D.Conn. 1963), aff'd, 330 F.2d 497 (2d Cir. 1964), cert. den., 379 U.S. 837, 85 S.Ct. 72, 13 L.Ed.2d 44 (1964).
In that case, decided under the old Bankruptcy Act and before the Bankruptcy Code was enacted (Bankruptcy Reform Act of 1978, Pub.L. 95–598, 92 Star. 2549), we held that where a bankruptcy court had decided all the issues that were before the Tax Court and the taxes had been assessed, the case should be dismissed for lack of “jurisdiction”. In reaching this result we relied upon Comas, Inc. v. Commissioner, 23 T.C. 8, 1954 WL 301 (1954). To understand the holdings in these cases, it is necessary to also understand the statutory context in which they arise.
Once the order of the bankruptcy court becomes final with respect to respondent's tax claims, generally neither the amount, nor the validity of the bankruptcy court's order is subject to review or reconsideration by this Court. McQuade v. Commissioner, 84 T.C. 137, 145 (1985); Comas, Inc. v. Commissioner, 23 T.C. 8, 12 (1954). As noted by the majority in its note 7, a decision entered approving a stipulated settlement agreement is an adjudication on the merits for purposes of res judicata.
McQuade v. Commissioner [Dec. 41,859], 84 T.C. 137, 140 (1985). Once the order of the Bankruptcy Court became final with respect to respondent's tax claims, generally neither the amount, nor the validity of the Bankruptcy Court's order is subject to review or reconsideration by this Court, McQuade v. Commissioner, supra at 145; Comas, Inc. v. Commissioner [Dec. 20,594], 23 T.C. 8, 12 (1954). As stated, upon dismissal of petitioner's appeal, the Bankruptcy Court's March 1, 1988, order became a final judgment rendered by a court of competent jurisdiction, and petitioner and respondent are the same parties that were involved in the bankruptcy proceedings.
As a result, mutuality of parties exists sufficient to activate the principle of estoppel, so that petitioner is not attempting to use ‘nonmutual offensive collateral estoppel‘ against respondent. The Bankruptcy Code, Pub. L. 95-598, 92 Stat. 2582, 11 U.S.C. section 505(a)(1) (1982 ed.), authorizes a bankruptcy court to ‘determine the amount or legality of any tax * * *.‘ This Court in Comas, Inc. v. Commissioner, 23 T.C. 8, 12 (1954), has concluded that ‘* * * Congress intended that once a bankruptcy court allowed a deficiency for which claim was filed and that court's action became final, the amount and validity of the deficiency was not thereafter to be the subject of a consideration by the Tax Court.‘
In the case of Plains Buying and Selling Association, 5 B.T.A. 1147 (1927), we have under consideration section 282(b), Revenue Act of 1926, ch. 27, 44 Stat. (Part 2) 9, 62, which is materially the same as section 6871(b). See S. Rept. No. 1622, 83d Cong., 2d Sess, p. 598 (1954), (1954 Code); Comas, Inc., 23 T.C. 8 (1954), (1939 Code); Missouri Pacific Railroad Co., 30 B.T.A 587 (1934), (Revenue Act of 1932). An exhaustive exposition and examination of the legislative history of section 6871(b)‘s progenitor was made by the Board.
In the case of Plains Buying and Selling Association, 5 B.T.A. 1147 (1927), we had under consideration section 282(b), Revenue Act of 1926, ch. 27, 44 Stat. (Part 2) 9, 62, which is materially the same as section 6871(b). See S. Rept. No. 1622, 83d Cong., 2d Sess, p. 598 (1954), (1954 Code); Comas, Inc., 23 T.C. 8 (1954), (1939 Code); Missouri Pacific Railroad Co., 30 B.T.A. 587 (1934), (Revenue Act of 1932). An exhaustive exposition and examination of the legislative history of section 6871(b)'s progenitor was made by the Board.
ch interest, additional amounts, and additions to the tax may be presented for adjudication in accordance with law, to the court before which the bankruptcy or receivership proceedings is pending, despite the pendency of proceedings for the redetermination of the deficiency in pursuance of a petition to the Tax Court; but no petition for any such redetermination shall be filed with the Tax Court after the adjudication of bankruptcy, the filing or (where approval is required by the Bankruptcy Act) the approval of a petition of, or the approval of a petition against, any taxpayer in any other bankruptcy proceeding, or the appointment of the receiver. The provisions of section 6871(b) are to the effect that if a petition has been filed with the Tax Court prior to the adjudication of bankruptcy or the appointment of a receiver for the taxpayer in a receivership proceeding in a State or Federal court, the Tax Court is not deprived or jurisdiction to redetermine the deficiency, Comas, Inc., 23 T.C. 8 (1954), but that after the appointment of such a receiver the Tax Court is without jursidiction to receive a petition and the determination of the tax claim is solely within the jurisdiction of the court which appointed the receiver. Leon I. Ross, 38 T.C. 309 (1962).
See also Estate of Samuel Want, 29 T.C. 1223, 1239 (1958), modified in part, reversed in part as to other issues 280 F.2d 777 (C.A. 2, 1960), holding a decision of a South Carolina court not to be res judicata as to gift and estate taxes where because of a case pending in this Court with respect to such taxes respondent refused to file a claim in the South Carolina State court upon being directed to do so under pain of being barred and foreclosed of all right and claim against the funds of the estate, but expressing no opinion as to whether the State court erred in its conclusion that it had jurisdiction to decide the validity and extent of the deficiencies in Federal gift and estate taxes already at issue in proper proceedings pending in this Court, and Ross Bowman, 17 T.C. 681, 685 (1951). In Comas, Inc., 23 T.C. 8 (1954), relied upon by petitioners, the issue was whether this Court had jurisdiction to determine the liability of petitioner therein as transferee of a transferee for a deficiency in income tax and unpaid income tax of another where a bankruptcy court had adjudicated such liability of that petitioner and determined that it was so liable. The basis of the decision in that case was that the bankruptcy court did have concurrent jurisdiction with this Court to determine the transferee's liability.