ORDERS:
FINAL DECISION ON MOTION FOR SUMMARY JUDGMENT
This matter is before me pursuant to the South Carolina Department of Revenue's
(Department) Motion for Summary Judgment against Anonymous Taxpayer ("Taxpayer"). This
motion is premised on the doctrine of collateral estoppel.
Pursuant to a SLED investigation, Taxpayer was found to have embezzled money from her
employer. She pled guilty to breach of trust in an amount greater than $5,000. Subsequently, the
trial judge found beyond a reasonable doubt that Taxpayer had embezzled $464,820.91. The issue
of how much Taxpayer embezzled was subsequently reviewed by the South Carolina Court of
Appeals and the South Carolina Supreme Court. Both affirmed the trial court's determination of the
amount embezzled.
The taxpayers did not report this amount on their joint income tax returns. As such, the
Department assessed tax, interest, and penalties based on $464,820.91 of additional income. The
taxpayers appealed this assessment claiming that Taxpayer embezzled only $90,000. The taxpayers
timely requested a contested case hearing before the Administrative Law Judge Division. The
Department filed this motion for summary judgment to prevent Taxpayer from relitigating the issue
of how much she embezzled. The basis for this motion is that the issue has been fully and fairly
determined by the trial court, the South Carolina Court of Appeals, and the South Carolina Supreme
Court.
Collateral estoppel occurs when a party in a second action seeks to preclude a party from
relitigating an issue which was decided in a previous action. South Carolina Property and Casualty
Insurance Guaranty Assoc. v. Wal-Mart Stores, Inc., 304 S.C. 210, 403 S.E.2d 625 (1991).
Collateral estoppel may be invoked even if the second action is based on a different claim that the
first action provided that the issue precluded is the same and was actually and necessarily litigated
and determined in the first action. Beall v. Doe, 281 S.C. 363, 315 S.E.2d 186 (Ct. App. 1984).
The taxpayers have now conceded that the imposition of collateral estoppel against Taxpayer
is appropriate. Accordingly, I find that Taxpayer is collaterally estopped from relitigating the issue
of the amount embezzled. Summary judgment is thus granted with respect to Taxpayer, and the
Department's assessment of income tax, interest, and penalties against her is upheld.
AND IT IS SO ORDERED.
MARVIN F. KITTRELL
Chief Administrative Law Judge
April 8, 1998
Columbia, South Carolina. |
