- 79 -
Pfeiffer Co. v. United States, 518 F.2d 124, 128-130 (8th Cir.
1975) (pending refund suit in District Court does not render
statutory notice and resulting deficiency assessment invalid);
Bar L Ranch v. Phinney, 400 F.2d 90, 92 (5th Cir. 1968) (pending
refund suit in District Court does not render statutory notice
and resulting deficiency assessment invalid); Florida v. United
States, 285 F.2d 596, 602-604 (8th Cir. 1960) (pending refund
suits in District Court do not prevent Government action in
different District Court to enforce payment of taxes). Most of
these cases cite dictum to the same effect in Flora v. United
States, 362 U.S. 145, 166 (1960).33 If these counterclaims are
not compulsory and thus can be the basis of a separate action,
tax cases can be split, at least for some purposes.
33"Moreover, if [the taxpayer] decides to remain in the
District Court, the Government may--but seemingly is not required
to--bring a counterclaim; and if it does, the taxpayer has the
burden of proof." [Flora v. United States, 362 U.S. 145, 166
(1960); fn. ref. omitted.]
With respect to Flora v. United States, supra, it's
interesting to observe that that case's central holding, that
refund suits can only be brought when taxes have been paid in
full, was, like Rothensies v. Electric Storage Battery Co., 329
U.S. 296 (1946), largely motivated by the desire not to divert
large numbers of tax cases from this Court to the district
courts. Flora v. United States, 362 U.S. at 175-176. After
United States v. Dalm, supra, and Mueller II, we won't divert tax
cases to the district courts if we refrain from holding that the
credit for prior taxes is part of the same claim or cause of
action for the purpose of permitting equitable recoupment any
more than we'll divert them by refusing to allow a narrow reading
of the single-transaction issue (the issue in Rothensies v.
Electric Storage Battery Co., supra) to block equitable
recoupment. See infra pp. 42-60 discussing the single-
transaction issue.
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