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Ordinarily, a taxpayer asserting an overpayment of hospital
tax must file a claim for refund or credit with the Secretary.
See secs. 6402(a), 6413(a); sec. 31.6402(a)-1, Employment Tax
Regs. If the Secretary denies the taxpayer’s claim for refund or
credit, the taxpayer may file suit in Federal District Court or
the Court of Federal Claims to recover any tax alleged to have
been erroneously or illegally assessed or collected. Sec.
7422(a); 28 U.S.C. sec. 1346(a) (2000). In addition, any claim
for a refund or credit must be made within 3 years from the time
the return was filed or 2 years from the time the tax was paid,
whichever of such periods expires later. Sec. 6511(a). No
credit or refund shall be allowed or made after the period of
limitations for filing such a claim expires. Sec. 6511(b)(1).
II. The Equitable Recoupment Doctrine
A. Generally
The doctrine of equitable recoupment is a judicially created
doctrine that, under certain circumstances, allows a litigant to
avoid the bar of an expired statutory limitation period. United
States v. Dalm, 494 U.S. 596, 605 (1990); Bull v. United States,
295 U.S. 247, 262 (1935). The doctrine prevents an inequitable
windfall to a taxpayer or to the Government that would otherwise
result from the inconsistent tax treatment of a single
9(...continued)
jurisdiction over petitioners’ hospital tax overpayments.
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Last modified: March 27, 2008