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some respects from Bull v. United States, supra, in both cases
the Government has received monies which in equity and
good conscience belong to the taxpayer, and in both the
allowance of recoupment should be made to avoid the bar
of the statutes of limitations. It is true that in the
Bull case both claims of the Government grew out of the
same transaction and were asserted against the same
money in the hands of the executor; but that, in
practical effect, is the situation that prevails here.
The Government has asserted two claims against the
monies of the estate that came into the hands of the
administratrix--one on account of past due income taxes
and the other on account of the estate tax due on the
net estate, and it is impossible to determine the
amount of the latter without making due allowance for
the deduction caused by the former. * * * [United
States v. Herring, 240 F.2d at 228.]
Four years after the Court of Appeals for the Fourth Circuit
decided the Herring case, the Court of Appeals for the Ninth
Circuit affirmed a case with similar facts, United States v.
Bowcut, 287 F.2d 654 (9th Cir. 1961), affg. 175 F. Supp. 218 (D.
Mont. 1959). In this case, the decedent died in 1952, and the
executrix (decedent's former wife) filed the estate tax return in
1953, paying the tax due. In 1954, the Government proposed
adjustments to decedent's income tax for 1947 through 1950 for
additional income tax, civil fraud penalties, and interest. The
executrix paid the taxes, penalties, and interest in
installments, and filed suit in District Court for refund of
income tax in the amount of the overpaid estate taxes on the
grounds of equitable recoupment.
In the District Court, the Government argued, inter alia,
that equitable recoupment was not appropriate under Bull v.
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