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In applying the single-transaction test so restrictively,
the Court of Claims relied on its earlier opinion in Ford v.
United States, 149 Ct. Cl. 558, 276 F.2d 17 (1960), whose facts
were closer to our case. Taxpayers had received shares of stock
in 1939 from their father’s estate, which had reported the shares
at an estate tax value of approximately $11,900. On audit of the
estate tax return, there had been an upward adjustment to
$23,715, which the estate accepted. In 1947, taxpayers sold the
shares, reported a date-of-death income tax basis of $165,800,
and claimed refund of an overpayment on this ground. The Court
of Claims determined the date-of-death value to be $165,000.
Neither taxpayers nor the Government adverted to whether the
Government might be entitled to recoupment of the time-barred
underpaid estate tax against the income tax refund. The Court of
Claims on its own initiative considered the issue, and, by a 3-2
vote, held that the Government was not entitled to recoupment
because the facts were not identical to those in Bull v. United
States, supra, and Stone v. White, supra. The Court of Claims
said that Rothensies v. Electric Storage Battery Co., 329 U.S.
296 (1946), held that the doctrine of equitable recoupment was
not flexible, but strictly limited, and limited for the good
reason that if the doctrine were broadened there would never come
a day of final settlement in the income tax system. Ford v.
United States, 276 F.2d at 23. The Court of Claims did not cite
United States v. Herring and United States v. Bowcut, and Rev.
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