- 25 -
for reopening years closed by the statute of limitations. See
O'Brien v. United States, 766 F.2d at 1049.
The Court of Appeals for the Seventh Circuit noted, however,
that the single-transaction test had been met. The court stated:
The "single transaction test," requiring that a
"single transaction or taxable event ha[s] been
subjected to two taxes on inconsistent theories,"
Rothensies, 329 U.S. at 300, 67 S.Ct. at 272, also
appears to be satisfied on these facts if we adopt the
reasoning of the Third Circuit in Boyle. The Boyle
court ruled that the "single transaction test" was
satisfied where undeclared dividends were erroneously
treated as assets, included as part of the corpus of
decedent's estate and subjected to estate tax, but
later were ruled taxable income upon distribution to
the beneficiaries. The net effect, the court noted,
was inconsistent treatment of the same fund directly
resulting in an overpayment of tax by the estate.
Essentially the same situation exists here where
inconsistent tax treatment of the same stock (in terms
of valuation) has directly resulted in the overpayment
of tax by the beneficiaries. [O'Brien v. United
States, supra at 1050-1051 n.16]
Petitioner also relies upon Estate of Vitt v. United States,
706 F.2d 871 (8th Cir. 1983), to support its position that double
taxation of the same fund under inconsistent theories satisfies
the single-transaction requirement.14 In Estate of Vitt v.
14The Court of Appeals for the Eighth Circuit cited Estate
of Vitt v. United States, 706 F.2d 871 (8th Cir. 1983), in a
recently decided case, Coohey v. United States, 172 F.3d 1060,
(8th Cir. 1999). In Coohey v. United States, supra, the court
found that, under the facts of that case, an AMT refund, based
upon repeal of a statute, for one year and the allowance of an
AMT credit for the following year "are clearly a single
transaction", because without the assessment and payment of the
AMT for the earlier year, there would never have been an AMT
(continued...)
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