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mitigation further at trial or on brief, I would deem petitioner
to have waived this defense, insofar as its ability to assert it
in this proceeding is concerned.
That might not be the end of the matter. The mitigation
provisions may have a preemptive effect on petitioner’s right to
equitable recoupment. Compare, e.g., Brigham v. United States,
200 Ct. Cl. 68, 470 F.2d 571, 577 (1972) with First Natl. Bank of
Omaha v. United States, 565 F.2d 507, 512, 518 (8th Cir. 1977).
However, respondent has not argued that equitable recoupment is
unavailable to petitioner because mitigation preempts it, nor did
petitioner argue that there is no preemption. Under the
circumstances, I would hold that respondent has waived the
preemption argument.25 Consequently, the mitigation provisions
25In light of the regulation stating that statutory
mitigation is only available for inconsistencies involving solely
the income tax, sec. 1311(a)-2(b), Income Tax Regs., and Chevron,
U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S.
837 (1984), which requires us to defer to that regulation if it
is reasonable, see Reno v. Koray, 515 U.S. ___, ___, 115 S. Ct.
2021, 2023 (1995) (Chevron deference owed to interpretive rules),
it would be unnecessary to decide whether, in the absence of the
regulation and Chevron, Chertkof v. United States, 676 F.2d 984,
987-992 (4th Cir. 1992), was correct in holding that statutory
mitigation is also available to correct inconsistencies in
application of estate tax and income tax. The weight of
authority is to the contrary, see Hall v. United States, 975 F.2d
722 (10th Cir. 1992) (windfall profits tax); Ketteman Trust v.
Commissioner, 86 T.C. 91, 110 (1986) (gift tax); Provident Natl.
Bank v. United States, 507 F. Supp. 1197 (E.D. Pa. 1981) (estate
tax); see also, Willis, Correction of Errors Via Mitigation and
Equitable Recoupment: Some People Still Do Not Understand, 52
Tax Notes 1421 (Sept. 16, 1991); Willis, Some Limits of Equitable
Recoupment, Tax Mitigation, and Res Judicata: Some Reflections
Prompted by Chertkof v. United States, 38 Tax Law. 625 (1985).
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