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offset against the stipulated 1981 and 1982 income tax debts an
$84,590 overpayment of estate tax. This claim for equitable
recoupment is the subject of the instant litigation.
Discussion
I. Contentions of the Parties
Petitioners contend both that their situation satisfies the
factual prerequisites for equitable recoupment relief and that
this Court has the legal authority to afford such relief. They
base their averments primarily on our recent decisions in Estate
of Branson v. Commissioner, 113 T.C. 6 (1999), Estate of Bartels
v. Commissioner, 106 T.C. 430 (1996), and Estate of Mueller v.
Commissioner, 101 T.C. 551 (1993).
Conversely, respondent asserts that this Court lacks
authority to recognize an equitable recoupment defense.
Respondent argues that cases such as Estate of Branson v.
Commissioner, supra, and Estate of Bartels v. Commissioner,
supra, were incorrectly decided and ignore a plain reading of
statutory and case law. In the alternative, respondent maintains
that Continental Equities, Inc. v. Commissioner, 551 F.2d 74 (5th
Cir. 1977), affg. in part and revg. in part T.C. Memo. 1974-189,
is controlling law in the Eleventh Circuit and thereby settles
the issues in this case, in a manner consistent with respondent’s
position, pursuant to the rule established in Golsen v.
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