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I would find that any adjustment through recoupment will
solely benefit the Administration Trust (and, through it, its
beneficiary subtrusts and their beneficiaries). Even though,
because of the reimbursements under probate court order, the
Administration Trust has been responsible for only 71.9 percent
of the estate tax that has been paid so far, I believe the
probate court would apportion any reduction in estate tax arising
from allowance of recoupment so that it would inure solely to the
benefit of the Administration Trust. The Administration Trust
paid all its income tax on the sale of its shares, including the
overpaid portion. There is thus an absolute identity of
interest. The situation seems to me to be quite analogous to
that of Stone v. White, so that any distinction based on the
existence of different legal entities would be purely artificial.
I would conclude that the identity-of-interest requirement
is satisfied.
5. Statutory Mitigation
Congress in 1938 enacted the mitigation provisions now
contained in sections 1311 through 1314 as a supplement to
equitable recoupment and other court-created correctives to the
injustices resulting from inconsistent treatment of related items
for Federal tax purposes. S. Rept. 1567, 75th Cong., 3d Sess. 48
(1938), 1939-1 C.B. (Part 2) 779, 815.24 If the complicated
24"The Federal courts in many somewhat similar tax cases
(continued...)
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