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taxpayer’s equitable recoupment claim did not require us to
exercise jurisdiction that was beyond the scope of the taxpayer’s
primary claim for redetermination of the deficiency, explaining
that “When a taxpayer raises an affirmative defense to a
deficiency determination, we need no additional source of
jurisdiction to render a decision with respect to the defense.
It is part of the entire action over which we have jurisdiction.”
Id.
In several cases following Mueller II, we reaffirmed our
jurisdiction to consider equitable recoupment as an affirmative
defense in resolving a deficiency proceeding. Estate of Branson
v. Commissioner, supra; Estate of Bartels v. Commissioner, 106
T.C. 430 (1996); Estate of Orenstein v. Commissioner, supra.
The Courts of Appeals that considered whether this Court may
entertain an equitable recoupment claim split on the question.
In Estate of Mueller v. Commissioner, 153 F.3d 302 (6th Cir.
1998), affg. on other grounds 107 T.C. 189 (1996), the Court of
Appeals held that this Court lacked jurisdiction to consider a
claim of equitable recoupment. In contrast, in Estate of Branson
v. Commissioner, 264 F.3d 904 (9th Cir. 2001), the Court of
Appeals reached the opposite conclusion.
For present purposes, any uncertainty regarding the Court’s
authority to apply the equitable recoupment doctrine was
eliminated with the enactment of the Pension Protection Act of
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