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transaction requirement had not been satisfied. Rothensies v.
Electric Storage Battery Co., 329 U.S. 296, 299 (1946).
What must be emphasized is that actually there was no
logical connection--much less a causal relationship--between the
time-barred excise tax refunds for 1919-21 and the inclusion in
taxable income for 1935 of the excise taxes paid for 1922-26.
Considering each year as a separate cause of action, cf.
Commissioner v. Sunnen, 333 U.S. 591, 598 (1948), there was no
transactional nexus whatsoever between the time-barred excise
taxes paid in 1919-21 and the excise taxes paid in 1922-26 that
the taxpayer recovered and was required to include in income in
1935. All the time-barred and the recovered excise taxes had in
common was the coincidence of the same general subject matter.
Since Rothensies v. Electric Storage Battery Co., supra,
the Supreme Court has not revisited the single-transaction
requirement of equitable recoupment except in dicta in United
States v. Dalm, supra at 605 n.5, where it did say that in
Rothensies v. Electric Storage Battery Co. it had emphasized that
the condition that must be satisfied is that "the Government has
taxed a single transaction, item, or taxable event”. The
inclusion of “item” in this phrase is significant for our case.
Although the income and estate taxes in this case were arguably
imposed on different taxable events (the estate tax was imposed
on the transfer of the shares on decedent’s death, whereas the
income tax was imposed upon the gain from the sale of the shares
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