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in the 1980 merger with Holiday Inns. At this time, the
Commissioner and the estate stipulated that for estate tax
purposes the Harrah's stock had a value of $19.41 per share.
Because of this stipulation, the value of the Harrah's stock was
not an issue on appeal. See Estate of Harrah v. United States,
supra at 1125 n.4.
After the stipulation of the value of the Harrah's stock,
the estate filed a revised claim for refund of its 1980 income
taxes. In 1988, the Government stated that it would oppose the
1980 refund claim on the grounds that the convertible
subordinated debentures were undervalued. In 1989, the estate
filed suit in District Court for refund of $10,542,641 of income
tax paid for the 1980 taxable year.
At this time, the estate filed a claim for refund of income
taxes for the 1983 and 1984 taxable years, and the marital trust
filed a claim with respect to its 1984 taxable year. The claims
filed for 1983 and 1984 were denied on the grounds that they were
untimely. As a result of the denial of these claims, the estate
amended its refund suit in District Court to include its claims
for the 1983 and 1984 years. The marital trust joined in this
action, and sought a refund for its 1984 taxable year.
The District Court applied the doctrine of equitable
recoupment and found the three refund claims were not barred by
the statute of limitations and also found that the proper
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