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requirements of these provisions are satisfied, then either a
taxpayer or the Government (depending on which has suffered from
the inconsistency) can obtain redress, regardless of the bar of a
statute of limitations. If the result of the required adjustment
is a tax deficiency, then it will be assessed and collected in
the same way as any other deficiency. If the result is a tax
overpayment, then the taxpayer must file a claim for refund,
unless the Government refunds it without the filing of a formal
claim. If the claim is denied or is not acted on in 6 months,
the taxpayer may then sue for a refund. Secs. 6532(a)(1),
7422(a).
The Administration Trust here applied for an income tax
refund, which was denied. Thereafter, petitioner in this case
raised mitigation as one of the affirmative defenses in its
amended petition, treating respondent's denial of its refund
claim as the final determination that would bring the mitigation
provisions into play. Respondent did not move to strike this
defense. Nevertheless, because petitioner failed to argue
24(...continued)
have sought to prevent inequitable results by applying principles
variously designated as estoppel, quasi estoppel, recoupment, and
set-off. For various reasons, mostly technical, these judicial
efforts can not extend to all problems of this type. Legislation
has long been needed to supplement the equitable principles
applied by the courts and to check the growing volume of
litigation by taking the profit out of inconsistency, whether
exhibited by taxpayers or revenue officials and whether
fortuitous or by design.” S. Rept. 1567, 75th Cong., 3d Sess. 48
(1938), 1939-1 C.B. (Part 2) 779, 815; emphasis added.
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