- 56 -
The Court of Claims view was applied under somewhat
different circumstances in Estate of Mann v. United States, 552
F. Supp. 1132 (N.D. Tex. 1982), affd. 731 F.2d 267 (5th Cir.
1984), a case cited by neither party. There, after a holding
that a decedent’s estate was entitled to an income tax refund on
the ground that a bad debt had been a business debt, the
Government’s equitable recoupment claim, based on the ground that
the estate should have paid estate tax on the refund claim, was
denied. As the District Court observed, because refund suits
19(...continued)
and one of these may have been correct. The first and arguably
correct one of these alternative grounds was that the estate had
not proved that there was any factual inconsistency, still less
its actual amount. Id. at 1150. The Court of Appeals, although
it felt no need to decide the case on any but the first ground
(fact as opposed to law), approved the District Court’s reasoning
about the estate’s failure of proof in a footnote, Minskoff v.
United States, 490 F.2d at 1285 n.1, and on this basis
distinguished Boyle v. United States, 355 F.2d 233 (3d Cir.
1965), where the sum at issue could not have been earned both
before and after the death of the decedent. (The District Court
had felt that Boyle was inconsistent with Rothensies v. Electric
Storage Battery Co., 329 U.S. 296 (1946), and had therefore
refused to follow Boyle v. United States, supra. Minskoff v.
United States, 349 F. Supp. at 1150 n.3.) With respect to this
issue of proof, our case resembles Boyle, rather than Minskoff:
Different valuations of a stock at the same time are inconsistent
on their face, and there is no need for petitioner to prove
anything on this score.
The District Court’s other alternative ground was that
equities weren't on the side of the taxpayer, who had failed to
report as income capital gain that clearly should have been
reported, and that therefore the doctrine of equitable
recoupment, being in the nature of an equitable defense, could
not be invoked by a party lacking clean hands. Id. at 1150. As
we shall see infra pp. 68-69, this is an aberrant view that
courts generally don't follow, which may no longer be
respondent's view, and which is incorrect. The Court of Appeals
was silent on this issue in Minskoff.
Page: Previous 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 NextLast modified: May 25, 2011