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redetermination of value of shares
at $1,700 per share . . . . . . 957,099 963,099
Minimum overpayment prior to recoupment . . . . 189,550
Plus: Maximum increase in credit for State
death taxes . . . . . . . . . . . . . . 278,428
Maximum overpayment prior to recoupment . . . . 467,978
Plus: Claimed recoupment . . . . . . . . . . . 265,999
Maximum overpayment with recoupment . . . . . . 733,977
Petitioner’s amended petition, filed April 22, 1991,
asserted two affirmative partial defenses against respondent’s
estate tax deficiency determination: First, that although the
Administration Trust’s September 10, 1990, claim for refund was
barred by the statute of limitations, respondent erred by not
applying equitable recoupment to reduce petitioner’s estate tax
deficiency by the Administration Trust’s 1986 income tax
overpayment caused by its use of a basis for the shares that was
too low; and, second, that respondent erred in not applying the
statutory mitigation provisions to allow the Administration Trust
to file a timely claim for refund to recover the amount of the
related overpayment. Issue was joined on both the equitable
recoupment and statutory mitigation defenses when respondent
denied these allegations in her amended answer.
After we issued our opinion on the valuation issue, Mueller
I, respondent moved, on the ground that the Tax Court lacked
jurisdiction to grant equitable recoupment relief, to dismiss
those paragraphs of the amended petition asserting the partial
defense of equitable recoupment. In response, we issued Mueller
II, holding that this Court has authority to apply equitable
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