- 4 -
doctrine of equitable recoupment is a judicially created doctrine
that precludes the unjust enrichment of a party to a lawsuit and
avoids a wasteful multiplicity of litigation. See Estate of
Mueller v. Commissioner, supra at 551-552. As applied for the
benefit of a taxpayer, the doctrine provides that, in some cases,
a claim for a refund of taxes barred by a statute of limitations
may, nevertheless, be recouped against a tax claim of the
Government. See Bull v. United States, 295 U.S. 247, 258-263
(1935). Equitable recoupment is in the nature of a defense
arising out of some feature of the transaction upon which the
claim for taxes is grounded. See id. at 262. The doctrine is
applied only where a single transaction constitutes the taxable
event claimed upon and the one considered in recoupment. See
Rothensies v. Electric Storage Battery Co., 329 U.S. 296, 299-300
(1946).
Recently, we listed the elements necessary to sustain the
defense of equitable recoupment:
A claim of equitable recoupment requires: (1) That
the refund or deficiency for which recoupment is sought
by way of offset be barred by time; (2) that the
time-barred offset arise out of the same transaction,
item, or taxable event as the overpayment or deficiency
before the Court; (3) that the transaction, item, or
taxable event have been inconsistently subjected to two
taxes; and (4) that if the subject transaction, item,
or taxable event involves two or more taxpayers, there
be sufficient identity of interest between the
taxpayers subject to the two taxes so that the
taxpayers should be treated as one.
* * *
Estate of Branson v. Commissioner, supra at ___ (slip op. at 15).
III. Analysis
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
Last modified: May 25, 2011