- 13 -
Commissioner, 92 T.C. at 788. Judge Halpern further observed
that
the Code is structured to channel tax litigation to the
Tax Court. We are the tax forum of choice, because
only here can the tax liability be litigated prior to
payment. Understandably, we preside over the vast
majority of tax litigation. * * * [Mueller II, 101
T.C. at 564 (Halpern, J., concurring); citations
omitted.]
If this Court lacked authority to consider equitable
recoupment, a taxpayer without the practical ability to prepay
the contested deficiency and sue for refund in a different forum
would be precluded from raising a defense available to a more
affluent taxpayer who has the means to do so. We do not believe
that Congress intended this result. Accordingly, we shall
continue to follow our opinions in Estate of Bartels v.
Commissioner, 106 T.C. 430 (1996), and Mueller II, supra.
Defensive Use
We held in Mueller III that equitable recoupment is
restricted to use as a defense against an otherwise valid claim
for a deficiency, and not to increase an overpayment of tax. See
also United States v. Dalm, 494 U.S. at 608 (tax refund courts
are without jurisdiction to consider time-barred refund claims
based solely upon equitable recoupment). We have found that
petitioner underreported the values of the Savings and Willits
shares on its estate tax return. Accordingly, petitioner has a
deficiency in estate tax, and is, therefore, properly positioned
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