- 35 -
held Brazilian coffee company from their deceased father's
estate. For estate tax purposes, the executors reported the
date-of-death fair market value of the stock at $11,857, which
was adjusted upward to $23,715 in an audit of the estate tax
return. Eight years later, in 1947, the children sold the stock
for $258,948, and reported gain based upon the adjusted date-of-
death value of the stock. The children then filed a timely claim
for refund, asserting that the basis reported on the income tax
returns was erroneous, and that the correct date-of-death value,
and, therefore correct basis, was $331,418. See id. at 20.
The Government denied the refunds, on the basis of the date-
of-death value reported in the estate tax return. The children
filed suit in the Court of Claims, and at trial the court found
that the actual fair market value of the stock at the date of the
father's death was greater than the amount the children received
in the 1947 sale. The Government did not advert that it might be
entitled under the doctrine of equitable recoupment to offset the
overpaid income tax against the earlier underpaid estate tax.
However, on its own initiative the Court of Claims considered
this issue, and on a 3-2 vote, held that the Government was not
entitled to recoupment because the facts were not identical to
those in Bull v. United States, 295 U.S. 247 (1935), and Stone v.
White, 301 U.S. 532 (1937). The court found that although "The
instant case comes fairly close to satisfying the recoupment
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