- 57 -
based on the deduction of worthless business debts are allowed
for 7 years, under section 6511(d)(1), and because the issues
posed by the two claims would require substantially different
proof, to allow recoupment in this situation would seriously
undermine the statute of limitations. Estate of Mann v. United
States, 552 F. Supp. at 1141. However, the District Court also
clearly expressed its preference for the reasoning of the Court
of Claims over Herring and Bowcut, Estate of Mann v. United
States, 552 F. Supp. at 1137-1140, and the Court of Appeals for
the Fifth Circuit affirmed, on the basis of Rothensies v.
Electric Storage Battery Co., Estate of Mann v. United States,
731 F.2d at 279. Estate of Mann clearly lines up with the Court
of Claims on the single-transaction issue, but it can be
distinguished from our case. On balance, I regard the later
cases as neither strengthening nor weakening my conclusion that
Herring and Bowcut represent the preferable view of the law.20
Respondent tries to distinguish the case at hand from
Herring, Bowcut, and Rev. Rul. 71-56, on the ground that in
20Our recent decision in Estate of Bartels v. Commissioner,
106 T.C. 430 (1996), furnishes additional implicit support for
United States v. Herring, 240 F.2d 225 (4th Cir. 1957), and
United States v. Bowcut, 287 F.2d 654 (9th Cir. 1961), as opposed
to the contrary cases. In that case, which presented the
Herring-Bowcut situation, respondent, consistently with the view
announced in Rev. Rul. 71-56, 1971-1 C.B. 404, didn't even raise
the single-transaction requirement as an objection to our
allowance of the taxpayer's equitable recoupment claim. Estate
of Bartels v. Commissioner, at 433 n.4. We therefore found the
single-transaction requirement not to be an obstacle to
permitting equitable recoupment.
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