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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 respondent
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