- 7 -
holding in Menard I recharacterizing a portion of the
compensation that Menards paid to Mr. Menard as a constructive
dividend, they overpaid so much of the hospital tax that they
remitted to the Commissioner during 1998 as was attributable to
the constructive dividend. Petitioners argue that, under the
doctrine of equitable recoupment, they are entitled to offset the
amount of their hospital tax overpayments against their
respective income tax deficiencies for TYE 1998 and that they
have met all of the requirements necessary to establish their
equitable recoupment defense.4
Respondent maintains that the Court lacks the authority
under the equitable recoupment doctrine to offset petitioners’
income tax deficiencies by the amounts of their overpaid hospital
taxes because we lack jurisdiction over hospital tax deficiencies
and overpayments. Respondent contends that hospital taxes play
no role in the determination of a deficiency within the meaning
of section 6211 and that neither additional hospital tax
liabilities nor hospital tax overpayments are included in a
3(...continued)
circumstances, the Court does not consider petitioners’ equitable
recoupment claim to be a “new issue” within the meaning of Rule
155, and respondent does not contend otherwise.
4Petitioners also asserted that respondent should be
equitably estopped from refusing to consider their overpayments
of hospital tax in the course of computing their correct tax
liabilities. However, petitioners failed to develop this
argument with any specificity, and we decline to address it.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Next
Last modified: March 27, 2008