- 2 -
Held: Equitable recoupment is restricted to use
as a defense against an otherwise valid claim. For
purposes of equitable recoupment, the notice of
deficiency is considered to be R's claim for additional
estate tax. See Bull v. United States, 295 U.S. 247
(1935). Once it is determined that R has no valid
claim for additional tax, the defense of equitable
recoupment has no application. Equitable recoupment
cannot be used to increase the amount of an overpayment
that P is entitled to recover.
Stevan Uzelac, Michael A. Indenbaum, and Paul L. Winter,
for petitioner.
Thomas M. Rath and Trevor T. Wetherington, for respondent.
OPINION
RUWE, Judge:* Respondent determined a deficiency of
$1,985,624 in petitioner's Federal estate tax. Respondent's
deficiency determination was primarily based on her assertion
that the date-of-death value of shares of stock in the Mueller
Co. was $2,150 per share, as opposed to $1,505 per share as
reported on the estate tax return. The amount of the deficiency
determined by respondent was the result of this increase in value
and other adjustments not in issue, including respondent's
allowance of a credit for tax on prior transfers in the amount of
$1,152,649, that had not been claimed by petitioner on its estate
*This case was reassigned to Judge Robert P. Ruwe by order
of the Chief Judge.
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