"It would be inconsistent to hold * * * shares to have had one value for estate tax purposes and another for income tax purposes. There is a presumption that the estate tax value of an asset is correct and applies also to determine income tax basis."
How later courts described this case
- "It would be inconsistent to hold * * * shares to have had one value for estate tax purposes and another for income tax purposes. There is a presumption that the estate tax value of an asset is correct and applies also to determine income tax basis."
- noting Commissioner's inconsistent treatment of shares at issue
Written by the judges who cited it.
The opinion
Chabot, J., concurring: I join in the majority opinion and the interpretation that the “claim” in the instant case, against which equitable recoupment is sought to lie, is respondent’s claim that there is a deficiency in estate tax.
The dissenters maintain that the claim against which equitable recoupment is sought to lie is only respondent’s claim that, because of the revaluation of the Mueller Co. stock, the estate tax liability is greater than it otherwise would be. Judge Beghe’s dissenting opinion, infra pp. 236-238, relies on Hemmings v. Commissioner, 104 T.C. 221 (1995), for the proposition “that the credit for previously paid taxes is not part of the same claim or cause of action as that attributable to the date-of-death value of the shares.” Dissenting op. p. 238 (Beghe, J.). However, as explained in Hemmings v. Commissioner, 104 T.C. at 233-235 , it appears that the only situation where the issues of the unclaimed credit and the stock value could be litigated in separate actions would be where the taxpayer first proceeds in a refund forum on one of the issues and the Commissioner then raises the other issue in a later notice of deficiency. Also, with exceptions not relevant in the instant case, in deficiency proceedings in the Tax Court, the different issues are merged into a single cause of action and neither side is permitted to bring a separate suit “in any court” once a decision on liability for “estate tax in respect of the taxable estate of the same decedent” has become final. Sec. 6512(a); Hemmings v. Commissioner, 104 T.C. at 226, 232-233 . Indeed, even in the other forums, the taxpayer apparently is barred from bringing a second suit for the same tax even if that second suit is based on a different issue. Hemmings v. Commissioner, 104 T.C. at 233-234 . Thus, Hemmings does not support the dissent’s contentions as to what is respondent’s claim in the instant case, against which equitable recoupment is sought to lie.
Because the majority opinion’s analysis, in combination with Mueller I, appears to dispose of the instant case, failure to respond to the other considerations dealt with in Judge Beghe’s dissent is not to be taken as acceptance of, or disagreement with, the views Judge Beghe expresses as to the many hurdles petitioner must overcome in order to succeed in the highly technical realm of equitable recoupment.
Cohen, Parr, and Ruwe, JJ., agree with this concurring opinion.