- 74 - Court’s jurisdiction to apply equitable recoupment would evaporate if and when it turned out that the petitioner was in an overpayment status, which might well not be known until we were about to enter a decision after a Rule 155 computation in a multi-issue case. To tie the requirement that the assertion of equitable recoupment be defensive to a taxpayer’s total position, rather than to the single transaction to which equitable recoupment would attach, would be a radical departure from the history of recoupment. Recoupment arose as an equitable rule of joinder that permitted adjudication in one suit of two claims, both arising out of the same transaction, that otherwise had to be brought separately under the common law forms of action. In re Davidovich, 901 F.2d 1533, 1537 (10th Cir. 1990). Hence, when recoupment was imported into the tax law by the Supreme Court in Bull v. United States, 295 U.S. 247 (1935), the Court did require that both claims arise out of the same transaction and that the recoupment claim be defensive, but it did not require that the taxpayer have a deficiency. Bull v. United States, 295 U.S. at 262. Indeed, the Court could not have done so; in Bull v. United States, supra, as in all later refund cases where taxpayers obtained equitable recoupment, the taxpayers had overpaid. The fact that the amount that they claimed in recoupment did not exceed the amount claimed by the Government from the same transaction sufficed to render their claim defensive. The language in Brigham v. United States, supra, on which respondentPage: Previous 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 Next
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