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recoupment. Specifically, we must decide whether the tax that is
the subject of a litigant’s equitable recoupment defense must be
one over which we have deficiency and overpayment jurisdiction
under sections 6211 and 6212.
I. Jurisdiction of the Tax Court
A. Deficiency and Overpayment Jurisdiction
Like other Federal courts, the Tax Court is a court of
limited jurisdiction, and it may exercise its jurisdiction only
to the extent authorized by Congress. Naftel v. Commissioner, 85
T.C. 527, 529 (1985). Section 7442 expressly provides that the
Court and its divisions shall have such jurisdiction as is
conferred on them by the Internal Revenue Code and by laws
enacted after February 26, 1926. See Adams v. Commissioner, 70
T.C. 446, 447 (1978); Chatterji v. Commissioner, 54 T.C. 1402,
1406 (1970).
Petitioners each received a notice of deficiency, and they
invoked our jurisdiction by filing a petition for redetermination
of a deficiency under section 6213(a). Section 6214(a) grants us
jurisdiction to redetermine the correct amount of a deficiency
and to determine whether any additional amounts or any additions
to tax should be assessed. Section 6211(a) in relevant part
defines the term “deficiency” as the amount by which the tax
imposed by subtitle A (sections 1 through 1563) or subtitle B
(sections 2001 through 2704), or chapter 41 (sections 4911 and
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Last modified: March 27, 2008