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limited jurisdiction and lacks general equitable
powers,” Commissioner v. McCoy, 484 U.S. 3, 7, 108
S.Ct. 217, 219, 98 L.Ed.2d 2 (1987) * * * Taken in
context, the Supreme Court’s pronouncement means that
the Tax Court has no equitable power to expand its
statutorily prescribed jurisdiction. This is quite
distinct from saying that the Tax Court has no
equitable powers in cases properly brought before it.
* * *
Although of limited jurisdiction, the Tax Court
must have the power to consider an equitable estoppel
claim, if considering the claim is necessary to the
appropriate disposition of the case before it. * * *
If the Tax Court lacked authority to entertain a
claim of equitable estoppel, taxpayers with such a
claim would no longer have a choice of fora for their
tax issues. They would effectively be forced to pay
their taxes and sue for a refund, submitting all of
their claims to the district courts. Taxpayers would
then be barred by res judicata from relitigating a
claim in the Tax Court. Thus, taxpayers would
essentially be denied the right to challenge
deficiencies in the Tax Court if they wanted to assert
an equitable estoppel claim. This would be an unfair
choice to pose to taxpayers, and would undermine the
purpose of the Tax Court. We therefore conclude that
the Tax Court did have jurisdiction over the Bokums’
equitable estoppel claim. [Bokum v. Commissioner,
supra at 1140-1141; citations and fn. ref. omitted.]
Hence, since an identical unfairness with respect to choice
of fora flows from a denial of authority to hear an equitable
recoupment defense, we believe it unlikely that the Court of
Appeals for the Eleventh Circuit would summarily reject
petitioners’ claim on the basis of Continental Equities, Inc. v.
Commissioner, supra. We therefore decline to do so. In
accordance with the precedent established by this Court in Estate
of Branson v. Commissioner, supra, Estate of Bartels v.
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