UNITED STATES DISTRICT COURT

DISTRICT OF NEW HAMPSHIRE

United States of America,

Plaintiff

v. Case No. 08-cv-499-SM

Opinion No. 2011 DNH 152

David M. Hulick and

Caroline P. Hulick,

Defendants/

Counterclaim Plaintiffs

and

State of New Hampshire

Department of Employment Security,

Defendant

O R D E R

Defendants/Counterclaim Plaintiffs, David and Caroline

Hulick, move the court to reconsider its recent order (document

no. 42), by which it granted in part, and denied in part, the

government’s motion to dismiss the Hulicks’ counterclaims. 

Specifically, the Hulicks assert that, despite their lack of

administrative exhaustion, the equitable doctrine of “recoupment”

permits them to maintain their counterclaims under 26 U.S.C. 

§ 7433. The court disagrees. 

The doctrine of equitable recoupment has extremely limited

application and the Supreme Court has “emphasized that a claim of

equitable recoupment will lie only where the Government has taxed

Case 1:08-cv-00499-SM Document 65 Filed 09/28/11 Page 1 of 3
a single transaction, item, or taxable event under two

inconsistent theories.” United States v. Dalm, 494 U.S. 596, 605

n.5 (1990). See also Id. at 608 (“In sum, our decisions in Bull

and Stone stand only for the proposition that a party litigating

a tax claim in a timely proceeding may, in that proceeding, seek

recoupment of a related, and inconsistent, but now time-barred

tax claim relating to the same transaction.”); IES Indus. v.

United States, 349 F.3d 574, 581 (8th Cir. 2003) (“[T]he doctrine

of equitable recoupment in federal tax jurisprudence allows a

court in limited situations to disregard a statute of limitations

in order to further the public interest that no one should be

permitted to avoid his just share of the tax burden except by

positive command of law. . . . As distinguished from offset,

equitable recoupment allows the IRS to set off a refund due a

taxpayer for one tax year by an underpayment from a different

year, but only in the circumstances described by the Court.”)

(citations and internal punctuation omitted); Rogers v. United

States, 281 F.3d 1108, 1128 (10th Cir. 2002) (“It is evident from

Supreme Court precedent, however, that recovery using the

doctrine of equitable recoupment is restricted to situations

where a single transaction or taxable event has been subjected to

two taxes on inconsistent legal theories.”) (citation and

internal punctuation omitted). 

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The Hulicks have not pointed to any authority - whether

binding or merely persuasive - that suggests they might properly

invoke the equitable doctrine of recoupment under the

circumstances presented in this case. Consequently, in light of

the precedent cited above, the court concludes that such an

equitable remedy is unavailable to them in this proceeding. 

Defendants’ motion to reconsider (document no. 46) is

granted. But, having reconsidered its order of June 30, 2011

(document no. 42), as well as the principles governing

application of equitable recoupment, the court is constrained to

deny defendants the relief they seek. 

SO ORDERED.

____________________________

Steven J. McAuliffe

Chief Judge

September 28, 2011

cc: Andrea A. Kafka, Esq.

David E. Will, Esq.

Joshua M. Wyatt, Esq.

Charles H. Bradley, III, Esq.

Richard J. Lavers, Jr., Esq.

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