- 81 -
Since it doesn't spring from the same transaction as the estate
tax claim, it wouldn't have had to be raised as a compulsory
counterclaim. Fed. R. Civ. P. 13. Thus, petitioner could have
raised recoupment as a defense in such a suit and, in the absence
of any claims about the credit, would have been entitled to
recoupment. Thereafter, the estate could have brought a separate
suit for the credit for prior taxes. It's highly significant
that this is the test that was applied in Hemmings: The
Government's claim was allowed in the second action because in
the first action the claim would have been a permissive, not a
compulsory, counterclaim. Hemmings v. Commissioner, 104 T.C. at
232, 234-235.34
I conclude, for the purposes of applying equitable
recoupment, that the cases cited in the majority's footnote 13
are inapposite and that the credit for previously paid taxes is
not part of the same claim or cause of action as that
attributable to the date of death value of the shares.
The majority's footnote 14 quotes at length a passage in
Rothensies v. Electric Storage Battery Co., 329 U.S. 296, 301
34The majority posits a different hypothetical case
(majority op. pp. 11-12) in which the credit for prior death
taxes is known and figures as an issue. But it assumes that a
court would take that credit into account when deciding whether
equitable recoupment is being used defensively and should
therefore be allowed. In so assuming, the majority begs the
question. There's no case law on point, and we can't be certain
what such a court would decide. We're therefore free to decide
which is the preferable rule, both for this hypothetical and for
the case at hand (the issue is the same for both).
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