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In his reply brief, petitioner further invokes the doctrine
of equitable recoupment as a basis for the relief he seeks. The
doctrine of equitable recoupment applies if “‘a single
transaction constitutes the taxable event claimed upon and the
one considered in recoupment.’ The single transaction must also
be subject to two taxes based on inconsistent legal theories.”
Parker v. United States, 110 F.3d 678, 683 (9th Cir. 1997); Kolom
v. United States, 791 F.2d 762, 767 (9th Cir. 1986).
Assuming, without deciding, that we have jurisdiction to
apply the doctrine and that it was properly raised by petitioner,
petitioner's situation fails to qualify for equitable recoupment.
Although a “single transaction”--the lease of boats--is involved,
petitioner participates in that transaction in two capacities:
as lessor/payee and as sole shareholder of the lessee/payor, due
to the separate recognition of the corporate entity. The taxes
he pays in each capacity are not based on “inconsistent
theories”. The disallowance to the payor of a deduction is not
inconsistent with the payee's receipt of income in respect of the
same payment.
In the final analysis, there is no reason to reduce
petitioner's income by the amount he reported from leasing his
boats to his corporation. The fact that petitioner misconstrued
the tax effects of doing business both individually and through a
corporation does not provide a basis to ignore the tax
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