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installment sale resulting in capital gains. The Commissioner
acquiesced and allowed the taxpayers a refund for 1962 but not
for earlier, barred years. The taxpayers then sued for refunds
of their overpayments for those earlier years, under the
alternative theories of mitigation and equitable recoupment. The
Court of Claims denied mitigation on the ground that the
Commissioner had not actively maintained inconsistent positions.
The Court of Claims then denied equitable recoupment, primarily
because it believed that mitigation, within its area of
applicability, preempts equitable recoupment, but also on the
alternative ground that equitable recoupment can only be used to
reduce the amount of deficiencies recoverable by the Government
in later years, and there were no such deficiencies, just time-
barred earlier years. Brigham v. United States, 470 F.2d at
577.28
Brigham’s language might, in isolation, like some language
in Mueller II, 101 T.C. at 552, be extended to support
respondent’s view, but petitioner persuasively argues that such
an extension would make no sense. Under respondent’s view, this
28"When its benefits are sought by the taxpayer, the
function of the doctrine [of equitable recoupment] is to allow
the taxpayer to reduce the amount of a deficiency recoverable by
the Government by the amount of an otherwise barred overpayment
of the taxpayer. * * * Here no such situation exists. * * *
Rather, the plaintiffs are attempting an extension of the
doctrine of equitable recoupment to the case of a refund of taxes
for an otherwise barred year." Brigham v. United States, 200 Ct.
Cl. 68, 470 F.2d 571, 577 (1972).
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