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iii. Barring recoupment would be inconsistent with tax
precedent
Respondent and the majority would now have us believe that
in tax cases Bull v. United States, supra, only eliminates to a
very limited extent the requirement that equitable recoupment be
defensive. Of course, under Bull v. United States, supra, and
later recoupment tax cases, a taxpayer can't gain any greater
credit from the Government under equitable recoupment than the
Government seeks from him (just as the Government can't gain any
greater credit than the taxpayer seeks from the Government). But
the majority and I part company on their conclusion that
equitable recoupment in favor of the taxpayer is further limited
in that it can't, in combination with any other unrelated claims
of the taxpayer, lead to any affirmative recovery by the
taxpayer. Bull v. United States, supra, by allowing recoupment
where the recouping party was technically the plaintiff,
liberalized the requirement that recoupment could only be used
defensively. It did so to prevent unjust enrichment of the
Government. For the Government to retain both the estate tax and
the income tax on the same fund was held to amount in law to a
fraud on the taxpayer's rights and to be against morality and
conscience. In limiting Bull v. United States, supra, as the
majority have done, they are thereby perpetuating unjust
enrichment in the case at hand.
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