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WELLS, J., dissenting: I respectfully disagree with the
majority's overly restrictive view of the applicability of the
doctrine of equitable recoupment. I agree with Judge Beghe that
all of the conditions for application of the doctrine have been
met. I, however, want to focus my disagreement on what I believe
is the majority's mistaken notion that the application of the
doctrine of equitable recoupment in the instant case is offensive
rather than defensive simply because the amount of an unrelated
overpayment of tax resulting from the estate's failure to claim a
credit for tax on prior transfers exceeds the amount of
additional estate tax due by reason of the increased valuation of
the shares in issue.
I believe that, once an equitable recoupment claim is
properly raised by a taxpayer in defense of an asserted
deficiency, the mere fact that the Commissioner's partial victory
fails to produce a deficiency should not prevent the Court from
allowing the equitable recoupment claim. If respondent had been
totally sustained on the deficiency, or even if the increase in
the valuation of the shares of stock in issue had been great
enough to create an overall deficiency in estate tax, I think the
majority would concede (assuming that they would agree that the
other requirements are met) that the recoupment claimed would be
allowed. The application of the doctrine should be governed
solely by matters relating to the shares, and not upon the
fortuity of unrelated circumstances, i.e. the convergence of (1)
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