- 70 -
we wouldn't even be discussing this issue. Petitioner would have
paid estate tax in an amount that was $1,152,649 less than the
amount that accompanied the return as prepared and filed, and
respondent would have determined an estate tax deficiency in
excess of $3 million rather than the one slightly less than $2
million in the statutory notice that was actually sent.27 As a
result of our valuation redetermination of the value of the
shares at $1,700 per share in Mueller I, there would be an estate
tax deficiency of $957,099, against which there would be
recoupment of $265,999, resulting in a reduced deficiency on the
order of $691,100.
Petitioner hasn't attempted to explain why it failed to
claim the previously taxed property credit on the estate tax
return, but whether petitioner has a valid excuse should have no
bearing on the outcome. As indicated supra p. 68, laches and
lack of diligence don't adversely affect a taxpayer's right to
recoupment. For purposes of recoupment, petitioner shouldn't be
disadvantaged by its initial oversight in failing to claim a
credit that respondent acknowledges petitioner's clearly entitled
to. To allow respondent to take advantage of petitioner's
oversight would perpetuate in another guise the unjust enrichment
that equitable recoupment is designed to prevent.
27For the purpose of this discussion, changes in other
credits can be and are ignored. See background statement, supra
pp. 35-36.
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