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Estate of Mueller we indicated that equitable recoupment might,
in any event, apply in a "same transaction" situation, see supra
note 4, even where an income tax or gift tax for a prior period
is involved, when we stated:
we interpret Gooch Milling as not preventing the Tax
Court from considering the affirmative defense of
equitable recoupment when it is properly raised in a
timely suit for redetermination of a tax deficiency
over which we have jurisdiction. * * * [Estate of
Mueller v. Commissioner, 101 T.C. at 560; emphasis
added.]
The same reasoning that led to our holding in Estate of
Mueller v. Commissioner, supra, leads us to conclude that
equitable recoupment of the estate tax overpayment against the
income tax deficiencies herein is not precluded by section
6214(b).
Our conclusion finds support in the legislative development
of section 6214(b). That section originated with the inclusion
of section 274(g) in the income tax provisions of the Revenue Act
of 1926, ch. 27, 44 Stat. 56. No comparable section was included
in the estate tax provisions of that Act. No mention was made of
the gift tax because that tax did not come into existence until
the Revenue Act of 1932. In enacting the gift tax provisions of
the 1932 Act, Congress included section 512(g) of the Revenue Act
of 1932, ch. 209, 47 Stat. 250, which was, except for the
designated tax, a verbatim version of section 274(g) of the
Revenue Act of 1926; no reference to section 512(g) appears in
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