- 33 -
gross estate. Each estate was allowed these deductions for
estate tax purposes.
Each estate also timely filed an administrative claim for
refund of the predeath income taxes it had paid; the claims were
denied, and each of the executors filed suit for refund of income
tax in the Court of Claims. If allowed, the refunds of the
improperly paid income taxes would have resulted in estate tax
deficiencies, as the earlier deductions allowed for the income
tax claims against the estates would have been overstated. After
the period of limitations had expired for the Government to
assert contingent claims against the estates, the Government
amended its answer in the refund suits seeking under the doctrine
of equitable recoupment to offset any resulting estate tax
deficiencies against any income tax refunds the court determined
to be due.
In both cases, the trial court judges, citing Herring v.
United States, supra, Bowcut v. United States, supra, and Rev.
Rul. 71-56, supra, found the single-transaction requirement had
been satisfied, and recommended decision for the Government. See
Wilmington Trust Co. v. United States, 43 AFTR 2d 79-801, 79-1
USTC par. 9223 (Ct. Cl. Trial Div. 1979), revd. and remanded 221
Ct. Cl. 686, 610 F.2d 703 (1979); McMullan v. United States, 42
AFTR 2d 78-5723, 78-2 USTC par. 9656 (Ct. Cl. Trial Div. 1978).
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