- 32 -
position in Rev. Rul. 71-56, supra, respondent now argues that
the single-transaction requirement is not met in the case at
hand. In support of his position, respondent cites two Court of
Claims cases, Wilmington Trust Co. v. United States, 221 Ct. Cl.
686, 610 F.2d 703 (1979), and Ford v. United States, 149 Ct. Cl.
558, 276 F.2d 17 (1960).
In Wilmington Trust Co. v. United States, supra, the
Government argued equitable recoupment in a factual context
similar to United States v. Herring, supra, and United States v.
Bowcut, supra.17 In this consolidated case, individual
taxpayers, Carpenter and McMullan, had been engaged in forest and
land management. Carpenter and McMullan incurred certain
expenses in these activities which they properly deducted as
ordinary and necessary business expenses. After Carpenter and
McMullan had died, the Government determined deficiencies in
their predeath income taxes, on the theory that the expenses were
reductions in the amount of capital gain that Carpenter and
McMullan each had realized on sales of timber. The executor of
each decedent's estate paid the income tax deficiencies and
deducted the income taxes paid as claims against the decedent's
16(...continued)
Electric Storage Battery Co., 329 U.S. 296 (1946), that equitable
recoupment was not available in these circumstances because the
single-transaction requirement was not satisfied.
17See Andrews, supra at 641.
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